Federal Register / Vol. 72, No. 67 / Monday, April 9, 2007 / Notices 17507 

1A public version of this and all public 

Department memoranda is on file in the Central 

Records Unit (‘‘CRU’’), room B–099 in the main 

building of the Commerce Department. 

2A public version of this memorandum is 

available in the CRU. 

determination. In addition, we are 

making available to the ITC all non–

privileged and non–proprietary 

information relating to this 

investigation. We will allow the ITC 

access to all privileged and business 

proprietary information in our files, 

provided the ITC confirms that it will 

not disclose such information, either 

publicly or under an administrative 

protective order, without the written 

consent of the Assistant Secretary for 

Import Administration. 

In accordance with section 705(b)(2) 

of the Act, if our final determination is 

affirmative, the ITC will make its final 

determination within 45 days after the 

Department makes its final 

determination. 

Notification of Parties 

In accordance with section 351.224(b) 

of the Department’s regulations, we will 

disclose to the parties the calculations 

for this preliminary determination 

within five days of its announcement. 

Unless otherwise notified by the 

Department, interested parties may 

submit case briefs within 50 days of the 

date of publication of the preliminary 

determination in accordance with 

section 351.309(c)(i) of the Department’s 

regulations. As part of the case brief, 

parties are encouraged to provide a 

summary of the arguments not to exceed 

five pages and a table of statutes, 

regulations, and cases cited pursuant to 

section 351.309(c)(2) of the 

Department’s regulations. Rebuttal 

briefs, which must be limited to issues 

raised in the case briefs, must be filed 

within five days after the case briefs are 

filed in accordance with section 

351.309(d) of the Department’s 

regulations. 

In accordance with section 351.310 of 

the Department’s regulations, we will 

hold a public hearing, if requested, to 

afford interested parties an opportunity 

to comment on this preliminary 

determination. Individuals who wish to 

request a hearing of the Department’s 

regulations must submit a written 

request pursuant to section 351.310(c) 

within 30 days of the publication of this 

notice in the Federal Register to the 

Assistant Secretary for Import 

Administration, U.S. Department of 

Commerce, Room 1870, 14th Street and 

Constitution Avenue, NW, Washington, 

DC 20230. Pursuant to section 

351.310(c) of the Department’s 

regulations, parties will be notified of 

the schedule for the hearing and parties 

should confirm by telephone the time, 

date, and place of hearing 48 hours 

before the scheduled time. Requests for 

a public hearing should contain: (1) 

party’s name, address, and telephone 

number; (2) the number of participants; 

and, (3) to the extent practicable, an 

identification of the arguments to be 

raised at the hearing. 

This determination is issued and 

published pursuant to sections 703(f) 

and 777(i) of the Act. 

Dated: March 29, 2007. 

David M. Spooner, 

Assistant Secretary for Import 

Administration. 

[FR Doc. E7–6499 Filed 4–6–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[C–580–857] 

Coated Free Sheet Paper From the 

Republic of Korea: Preliminary 

Affirmative Countervailing Duty 

Determination 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: The Department of Commerce 

(‘‘the Department’’) preliminarily 

determines that countervailable 

subsidies are being provided to 

producers and exporters of coated free 

sheet paper (‘‘CFS paper’’) from the 

Republic of Korea (‘‘Korea’’). For 

information on the estimated subsidy 

rates, see the ‘‘Suspension of 

Liquidation’’ section of this notice. 

EFFECTIVE DATE: April 9, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Maura Jeffords or Kristen Johnson, AD/ 

CVD Operations, Office 3, Import 

Administration, U.S. Department of 

Commerce, Room 4014, 14th Street and 

Constitution Avenue, NW., Washington, 

DC 20230; telephone: (202) 482–3146 

and (202) 482–4793, respectively. 

SUPPLEMENTARY INFORMATION:

Background 

On October 31, 2006, the Department 

received the petition filed in proper 

form by NewPage Corporation 

(‘‘petitioner’’). This investigation was 

initiated on November 20, 2006. See 

Notice of Initiation of Countervailing 

Duty Investigations: Coated Free Sheet 

Paper from the People’s Republic of 

China, Indonesia, and the Republic of 

Korea, 71 FR 68546 (November 27, 

2006) (‘‘Initiation Notice’’), and 

accompanying Initiation Checklist for 

CVD Petition on CFS paper from Korea 

(November 20, 2007) (‘‘Initiation 

Checklist’’).1 On December 19, 2006, 

petitioner timely requested a 65-day 

postponement of the preliminary 

determination for this investigation. On 

December 22, 2006, the Department 

postponed the deadline for the 

preliminary determination by 65 days to 

no later than March 30, 2007, in 

accordance with section 703(c)(1)(A) of 

the Tariff Act of 1930, as amended (‘‘the 

Act’’). See Coated Free Sheet Paper from 

Indonesia, the People’s Republic of 

China and the Republic of Korea: Notice 

of Postponement of Preliminary 

Determinations in the Countervailing 

Duty Investigations, 71 FR 78403 

(December 29, 2006). 

Due to the large number of producers 

and exporters of CFS paper in Korea, we 

determined that it is not possible to 

investigate each producer or exporter 

individually and selected four 

producers/exporters of CFS paper to be 

mandatory respondents: EN Paper Mfg. 

Co., Ltd. (‘‘EN Paper’’) (formerly Shinho 

Paper Co., Ltd. (‘‘Shinho Paper’’)), 

Kyesung Paper Co., Ltd. (‘‘Kyesung’’), 

Moorim Paper Co. Ltd. (‘‘Moorim’’) 

(formerly Shinmoorim Paper Mfg. Co., 

Ltd.), and Hansol Paper Co., Ltd. 

(‘‘Hansol’’) (collectively, 

‘‘respondents’’). See Memorandum from 

the Team, through Office Director 

Melissa Skinner, to Deputy Assistant 

Secretary Stephen J. Claeys: Regarding 

Respondent Selection (December 4, 

2006) (‘‘Respondent Selection Memo’’).2

On December 6 and 8, 2006, 

respondents submitted comments on 

our Respondent Selection Memo, in 

which they argued that the Department 

should select an additional mandatory 

respondent. On December 20, 2006, we 

responded to respondents’ comments, 

stating that we would not deviate from 

our original decision to investigate four 

mandatory respondents in the instant 

investigation. See Memorandum from 

Program Manager Eric B. Greynolds, 

through Office Director Melissa Skinner, 

to Deputy Assistant Secretary Stephen J. 

Claeys: Regarding Response to 

Comments from Interested Parties 

Regarding Respondent Selection 

(December 20, 2006) (‘‘Second 

Respondent Selection Memorandum’’). 

On December 14, 2006, we issued our 

initial questionnaire to the Government 

of Korea (‘‘the GOK’’) and requested that 

the GOK forward the relevant sections 

of the initial questionnaire to the 

mandatory respondents. 

On December 14, 2006, petitioner 

submitted a new subsidy allegation. On 

January 3, 2007, we declined to initiate 


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3 Kyesung’s affiliated company, Namhan Paper 

Co., Ltd., submitted the company’s response on 

February 2, 2007. See ‘‘Cross-Ownership’’ section, 

below, for more information on Namhan Paper Co., 

Ltd. 

4A copy of this memorandum is available in the 

CRU. 

on petitioner’s new subsidy allegation. 

See Memorandum from the Team 

through Program Manager Eric B. 

Greynolds, to Office Director Melissa 

Skinner: Regarding New Subsidy 

Allegation (January 3, 2007). 

On January 26, 2007, the GOK and 

respondents submitted their responses 

to our initial questionnaire. Also on 

January 26, 2007, Hankuk Paper Mfg. 

Co., Ltd. (‘‘Hankuk’’) submitted a 

voluntary response to the Department’s 

December 14, 2006, initial 

questionnaire. Because Hankuk was not 

selected as a mandatory respondent, we 

have not considered the company’s 

questionnaire response in reaching this 

preliminary determination and have not 

calculated a company-specific CVD rate 

for Hankuk. 

On February 2, 2007, EN Paper, 

Kyesung,3 and the GOK submitted their 

responses to the company-specific 

allegations. Between February 23 and 

March 12, 2007, we issued 

supplemental questionnaires to the GOK 

and respondents. Between March 5 and 

16, 2007, the GOK and respondents 

submitted responses to our 

supplemental questionnaires. 

On March 8, 2007, petitioner 

submitted pre-preliminary comments on 

a number of issues, which we have 

considered in reaching this preliminary 

determination. In particular, petitioner 

argues that, despite instructions from 

the Department to report all loan data, 

respondents failed to report any of their 

short-term loans. Petitioner discusses 

that in the initial questionnaire, 

referring to petitioner’s allegations that 

members of the pulp and paper industry 

received a disproportionate share of 

loans from the Korea Development Bank 

(‘‘KDB’’) and other GOK-owned entities 

and that the GOK directed credit to the 

pulp and paper industry through its 

control of lending practices in Korea, 

the Department specifically requested 

the respondents to answer the items in 

the Standard Questions and Loan 

Benchmark and Loan Guarantee 

Appendices. Petitioner further claims 

that the unreported short-term loans 

were provided by the GOK for financing 

the importation of raw materials as well 

as the export of finished goods. 

Petitioner further claims that the Bank 

of Korea (‘‘BOK’’) administers the trade 

financing under the Aggregate Credit 

Ceiling Loan program. 

Respondents submitted rebuttal 

comments to petitioner’s prepreliminary comments on March 13 and 

20, 2007. Respondents state that they 

did not report short-term loan data 

because petitioner did not make an 

allegation concerning short-term 

lending and the Department neither 

initiated on nor asked about short-term 

loans in the initial questionnaire. They 

claim that the Department’s Initiation 

Checklist makes clear that the 

investigation on loans from the KDB and 

other GOK-owned entities and the 

GOK’s direction of credit to the pulp 

and paper industry is limited to the 

allegation of subsidized long-term loans. 

See Initiation Checklist at 7–9, 16–18. 

We agree with respondents that the 

Department’s examination of KDB 

lending and the GOK’s direction of 

credit, in Korea CVD proceedings, has 

focused on long-term lending. However, 

we find that additional information 

regarding the respondents’ short-term 

lending is required to fully analyze the 

GOK’s provision of these loans. For 

more discussion of the short-term loan 

program, see the section ‘‘Program For 

Which More Information Is Required,’’

below. 

On March 23, 2007, petitioner 

submitted additional pre-preliminary 

comments. Respondents submitted a 

response to petitioner’s additional 

comments on March 27, 2007. On 

March 26, 2007, petitioner submitted a 

request, pursuant to section 705(a)(1) of 

the Act to align the final determination 

in this investigation with the 

companion antidumping investigations. 

We will address this request in a 

separate Federal Register notice. 

Scope of the Investigation 

The merchandise covered by this 

investigation includes coated free sheet 

paper and paperboard of a kind used for 

writing, printing or other graphic 

purposes. Coated free sheet paper is 

produced from not-more-than 10 

percent by weight mechanical or 

combined chemical/mechanical fibers. 

Coated free sheet paper is coated with 

kaolin (China clay) or other inorganic 

substances, with or without a binder, 

and with no other coating. Coated free 

sheet paper may be surface-colored, 

surface-decorated, printed (except as 

described below), embossed, or 

perforated. The subject merchandise 

includes single- and double-side-coated 

free sheet paper; coated free sheet paper 

in both sheet or roll form; and is 

inclusive of all weights, brightness 

levels, and finishes. The terms ‘‘wood 

free’’ or ‘‘art’’ paper may also be used to 

describe the imported product. 

Excluded from the scope are: (1) 

Coated free sheet paper that is imported 

printed with final content printed text 

or graphics; (2) base paper to be 

sensitized for use in photography; and 

(3) paper containing by weight 25 

percent or more cotton fiber. 

Coated free sheet paper is classifiable 

under subheadings 4810.13.1900, 

4810.13.2010, 4810.13.2090, 

4810.13.5000, 4810.13.7040, 

4810.14.1900, 4810.14.2010, 

4810.14.2090, 4810.14.5000, 

4810.14.7040, 4810.19.1900, 

4810.19.2010, and 4810.19.2090 of the 

Harmonized Tariff Schedule of the 

United States (‘‘HTSUS’’). While 

HTSUS subheadings are provided for 

convenience and customs purposes, our 

written description of the scope of this 

investigation is dispositive. 

Scope Comments 

In accordance with the preamble to 

the Department’s regulations (see 

Antidumping Duties; Countervailing 

Duties, 62 FR 27296, 27323 (May 19, 

1997) (‘‘Preamble’’)), in our Initiation 

Notice we set aside a period of time for 

parties to raise issues regarding product 

coverage, and encouraged all parties to 

submit comments within 20 calendar 

days of publication of the Initiation 

Notice. 

On December 18, 2006, respondents 

in the antidumping duty investigation of 

CFS from Indonesia submitted timely 

scope comments on the administrative 

record of that investigation. On January 

12, 2007, the Department requested that 

the respondents file these comments on 

the administrative records of all the CFS 

investigations. See Memorandum from 

Alice Gibbons to the File (January 12, 

2007). On January 12, 2007, respondents 

re-filed these comments on the 

administrative record of all the CFS 

investigations. On January 19, 2007, 

petitioner filed a response to these 

comments. 

The respondents requested that the 

Department exclude from its 

investigations cast-coated free sheet 

paper. The Department analyzed this 

request, together with the comments 

from petitioner, and determined that it 

is not appropriate to exclude cast-coated 

free sheet paper from the scope of these 

investigations. See Memorandum to 

Stephen J. Claeys, Deputy Assistant 

Secretary for Import Administration: 

Regarding Request to Exclude CastCoated Free Sheet Paper from the 

Antidumping Duty and Countervailing 

Duty Investigations on Coated Free 

Sheet Paper (March 22, 2007).4

Injury Test 

Because Korea is a ‘‘Subsidies 

Agreement Country’’ within the 


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meaning of section 701(b) of the Act, the 

International Trade Commission (‘‘ITC’’) 

is required to determine whether 

imports of the subject merchandise from 

Korea materially injure, or threaten 

material injury to, a U.S. industry. On 

December 29, 2006, the ITC published 

its preliminary determination that there 

is a reasonable indication that an 

industry in the United States is 

materially injured by reason of imports 

from China, Indonesia, or Korea of 

subject merchandise. See Coated Free 

Sheet Paper from China, Indonesia, and 

Korea, Investigation Nos. 701–TA–444–

446 (Preliminary) and 731–TA–1107–

1109 (Preliminary), 71 FR 78464 

(December 29, 2006). 

Period of Investigation 

The period of investigation (‘‘the 

POI’’) for which we are measuring 

subsidies is January 1, 2005, through 

December 31, 2005, which corresponds 

to the most recently completed fiscal 

year for all of the respondents. See 19 

CFR 351.204(b)(2). 

Cross-Ownership 

In the instant investigation, we are 

examining cross-owned companies 

within the meaning of section 771(33) of 

the Act, whose relationship may be 

sufficient to warrant treatment as a 

single company with a single, combined 

CVD rate. In the CVD questionnaire, 

consistent with our past practice, the 

Department defined companies as 

sufficiently related where one company 

owns five percent or more of the other 

company, or where companies prepare 

consolidated financial statements. The 

Department has also stated that 

companies may be considered 

sufficiently related where there are 

common directors or one company 

performs services for the other 

company. According to the 

questionnaire, where such companies 

produce the subject merchandise or 

where such companies have engaged in 

certain financial transactions with the 

company producing the subject 

merchandise, the affiliated parties are 

required to respond to the Department’s 

questionnaire. 

In its questionnaire response, 

Kyesung identified Namhan Paper Co., 

Ltd. (‘‘Namhan’’) and Poongman Paper 

Co., Ltd. (‘‘Poongman’’) as its affiliated 

companies that produce and sell subject 

merchandise. Namhan and Poongman 

merged during the POI. Therefore, 

Namhan submitted a questionnaire 

response covering the POI that 

contained data for Namhan and 

Poongman before and after the merger 

(as one company). Similarly, in its 

questionnaire response, Moorim 

identified Moorim SP as its affiliate that 

produces and sells subject merchandise. 

Moorim SP submitted a questionnaire 

response to the Department. 

For the countervailable subsidy 

benefits enjoyed by Kyesung and 

Namhan/Poongman and Moorim and 

Moorim SP, we attributed those benefits 

in accordance with 19 CFR 

351.525(b)(6)(ii), which states that if two 

(or more) corporations with crossownership produce the subject 

merchandise, the Department will 

attribute the subsidies received by either 

or both companies to the products 

produced by both companies. Therefore, 

we have preliminarily calculated a 

single CVD ad valorem rate for Kyesung 

and Moorim, respectively, by dividing 

the combined subsidy benefits for the 

cross-owned companies by the 

companies’ consolidated total sales, or 

consolidated total export sales, as 

appropriate. 

Subsidies Valuation Information 

Benchmarks for Loans and Discount 

Rate 

A. Benchmark for Long-Term Loans 

Issued Through 2005 

Pursuant to 19 CFR 351.524(d)(3)(i), 

the Department will use, when 

available, the company-specific cost of 

long-term, fixed rate loans (excluding 

loans deemed to be countervailable 

subsidies) as a discount rate for 

allocating non-recurring benefits over 

time. Similarly, pursuant to 19 CFR 

351.505(a), the Department will use the 

actual cost of comparable borrowing by 

a company as a loan benchmark, when 

available. According to 19 CFR 

351.505(a)(2), a comparable commercial 

loan is defined as one that, when 

compared to the loan being examined, 

has similarities in the structure of the 

loan (e.g., fixed interest rate vs. variable 

interest rate), the maturity of the loan 

(e.g., short-term vs. long-term), and the 

currency in which the loan is 

denominated. 

During the POI, EN Paper (formerly 

known as Shinho Paper), Hansol, 

Kyesung, and Moorim had outstanding 

long-term won-denominated and 

foreign-currency denominated loans 

from the KDB and other governmentowned financial institutions. For this 

preliminary determination, we are using 

the following benchmarks to calculate 

the subsidies attributable to 

respondents’ countervailable long-term 

loans obtained in the years 1993 

through 2005: 

(1) For countervailable, foreigncurrency denominated loans for 

creditworthy companies, we used, 

where available, the company-specific 

interest rates on the companies’

comparable commercial, foreign 

currency loans. Where no such 

benchmark instruments were available, 

consistent with 19 CFR 351.505(a)(3)(ii) 

as well as our methodology in prior 

Korea CVD cases, we relied on the 

prime lending rates as reported by the 

IMF’s International Financial Statistics 

Yearbook (‘‘IMF Yearbook’’). See Final 

Affirmative Countervailing Duty 

Determination: Dynamic Random 

Access Memory Semiconductors from 

the Republic of Korea, 68 FR 37122 

(June 23, 2003) (‘‘DRAMS 

Investigation’’), and accompanying 

Issues and Decision Memorandum at 

‘‘Discount Rates and Benchmark Loans’’

(‘‘DRAMS Investigation 

Memorandum’’). 

(2) For countervailable, wondenominated long-term loans, we used, 

where available, the company-specific 

interest rates on the companies’

comparable commercial, wondenominated loans. If such loans were 

not available, we used the companyspecific corporate bond rate (for 

commercial debt preliminarily found 

not to be countervailable) on the 

companies’ won-denominated public 

and private bonds. See 19 CFR 

351.505(a)(3)(iii). Where companyspecific rates were not available, we 

used the national average of the yields 

on three-year, won-denominated 

corporate bonds, as reported by the 

Bank of Korea (‘‘BOK’’). This approach 

is consistent with the Department’s past 

practice. See DRAMS Investigation 

Memorandum, at ‘‘Discount Rates and 

Benchmark Loans.’’

(3) For countervailable, wondenominated commercial debt issued by 

the KDB, we used, where available, the 

company-specific corporate bond rate 

on the companies’ won-denominated 

public and private bonds. See 19 CFR 

351.505(a)(3)(iii). Where companyspecific rates were not available, we 

used the national average of the yields 

on three-year, won-denominated 

corporate bonds, as reported by the 

BOK. 

Further, in accordance with 19 CFR 

351.505(a)(2), our benchmarks take into 

consideration the structure of the 

government-provided loans. For fixedrate loans, pursuant to 19 CFR 

351.505(a)(2)(iii), we used benchmark 

rates issued in the same year that the 

government loans were issued. For 

variable-rate loans outstanding during 

the POI, pursuant to 19 CFR 

351.505(a)(5)(i), our preference is to use 

the interest rates of variable-rate lending 

instruments issued during the year in 

which the government loans were 

issued. Where such benchmark 


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instruments were unavailable, we used 

interest rates from loans issued during 

the POI as our benchmark, as such rates 

better reflect a variable interest rate that 

would be in effect during the POI. This 

approach is in accordance with the 

Department’s practice in cases with 

similar facts. See, e.g., Final Results and 

Partial Rescission of Countervailing 

Duty Administrative Review: Stainless 

Steel Sheet and Strip From the Republic 

of Korea, 68 FR 13267 (March 19, 2003), 

and accompanying Issues and Decision 

Memorandum, at Comment 8; see also 

19 CFR 351.505(a)(5)(ii). 

In addition, because we preliminarily 

determined that Poongman was 

uncreditworthy in 2004, in accordance 

with 19 CFR 351.524(d)(3)(ii) (see 

‘‘Creditworthiness’’ section, below), we 

have calculated for Poongman a longterm uncreditworthy benchmark and 

discount rate for 2004. According to 19 

CFR 351.505(a)(3)(iii), in order to 

calculate these rates, the Department 

must specify values for four variables: 

(1) The probability of default by an 

uncreditworthy company; (2) the 

probability of default by a creditworthy 

company; (3) the long-term interest rate 

for creditworthy borrowers; and (4) the 

term of the debt. For the probability of 

default by an uncreditworthy company, 

we have used the average cumulative 

default rates reported for the Caa- to Crated category of companies as 

published in Moody’s Investors Service, 

‘‘Historical Default Rates of Corporate 

Bond Issuers, 1920–1997’’ (February 

1998). 

B. Benchmark Discount Rates 

Certain programs examined in this 

investigation require the allocation of 

benefits over time. Thus, we have 

employed the allocation methodology 

described under 19 CFR 351.524(d). 

Pursuant to 19 CFR 351.524(d)(3)(i), we 

based our discount rate upon data for 

the year in which the government 

agreed to provide the subsidy. Under 19 

CFR 351.524(d)(3)(i)(A), our preference 

is to use the cost of long-term, fixed-rate 

loans of the firm in question. Thus, 

where available, we used companyspecific long-term loan benchmark of 

corporate bond rates on public and 

private bonds. Where those benchmarks 

are unavailable, pursuant to 19 CFR 

351.524(d)(3)(i)(B), we used the national 

average of the yields on three-year 

corporate bonds, as reported by the 

BOK. 

C. Benchmarks for Short-Term 

Financing 

The benefit calculation for the Export 

and Import Credit Financing from the 

Export-Import Bank of Korea requires 

the application of a won-denominated, 

short-term interest rate benchmark. 

Absent a company-specific interest rate, 

we used as our benchmark the lending 

rate for won-denominated loans for the 

POI, as reported in the IMF Yearbook. 

This approach is in accordance with 19 

CFR 351.505(a)(3)(ii) and the 

Department’s practice. See, e.g., 

Preliminary Results of Countervailing 

Duty Administrative Review: CorrosionResistant Carbon Steel Flat Products 

from the Republic of Korea, 71 FR 

53413, 53419 (September 11, 2006) 

(unchanged at the final results, see Final 

Results of Countervailing Duty 

Administrative Review: CorrosionResistant Carbon Steel Flat Products 

from the Republic of Korea, 72 FR 119 

(January 3, 2007)). 

D. Allocation Period 

Under 19 CFR 351.524(d)(2)(i), we 

will presume the allocation period for 

non-recurring subsidies to be the 

average useful life (‘‘AUL’’) of 

renewable physical assets for the 

industry concerned, as listed in the 

Internal Revenue Service’s (‘‘IRS’’) 1977 

Class Life Asset Depreciation Range 

System (‘‘IRS tables’’), as updated by the 

U.S. Department of the Treasury. The 

presumption will apply unless a party 

claims and establishes that these tables 

do not reasonably reflect the AUL of the 

renewable physical assets for the 

company or industry under 

investigation, and the party can 

establish that the difference between the 

company-specific or country-wide AUL 

for the industry under investigation is 

significant, pursuant to 19 CFR 

351.524(d)(2)(ii). For assets used to 

manufacture products such as CFS 

paper, the IRS tables prescribe an AUL 

of 13 years. 

In their questionnaire responses, each 

respondent company stated that it 

would not attempt to rebut the 

regulatory presumption by meeting the 

criteria set forth in 19 CFR 

351.524(d)(2)(iii). Thus, for respondents, 

we will use the IRS AUL of 13 years to 

allocate any non-recurring subsidies for 

purposes of this preliminary 

determination. 

Further, for non-recurring subsidies, 

we have applied the ‘‘0.5 percent 

expense test’’ described in 19 CFR 

351.524(b)(2). Under this test, we 

compare the amount of subsidies 

approved under a given program in a 

particular year to sales (total sales or 

total export sales, as appropriate) for the 

same year. If the amount of subsidies is 

less than 0.5 percent of the relevant 

sales, then the benefits are allocated to 

the year of receipt rather than allocated 

over the AUL period. 

E. Creditworthiness 

The examination of creditworthiness 

is an attempt to determine if the 

company in question could obtain longterm financing from conventional 

commercial sources. See 19 CFR 

351.505(a)(4). According to 19 CFR 

351.505(a)(4)(i), the Department will 

generally consider a firm to be 

uncreditworthy if, based on information 

available at the time of the governmentprovided loan, the firm could not have 

obtained long-term loans from 

conventional commercial sources. In 

making this determination, according to 

19 CFR 351.505(a)(4)(i), the Department 

normally examines the following four 

types of information: (1) The receipt by 

the firm of comparable commercial 

long-term loans; (2) present and past 

indicators of the firm’s financial health; 

(3) present and past indicators of the 

firm’s ability to meet its costs and fixed 

financial obligations with its cash flow; 

and (4) evidence of the firm’s future 

financial position. 

With respect to item number one 

above, pursuant to 19 CFR 

351.505(a)(4)(ii), in the case of firms not 

owned by the government, the receipt 

by the firm of comparable long-term 

commercial loans, unaccompanied by a 

government-provided guarantee (either 

explicit or implicit), will normally 

constitute dispositive evidence that the 

firm is not uncreditworthy. However, 

according to the preamble to the 

Department’s CVD regulations, in 

situations, for instance, where a 

company has taken out a single 

commercial bank loan for a relatively 

small amount, where a loan has unusual 

aspects, or where we consider a 

commercial loan to be covered by an 

implicit government guarantee, we may 

not view the commercial loan(s) in 

question to be dispositive of a firm’s 

creditworthiness. See Preamble, at 

65367. 

In the Initiation Notice, we indicated 

that we would investigate Shinho 

Paper’s creditworthiness for the period 

1998 through 2005, and Poongman’s 

creditworthiness for 2004. As discussed 

in the March 29, 2007, memorandum 

entitled ‘‘Shinho Paper’s 

Equityworthiness and 

Creditworthiness,’’ we preliminarily 

determined Shinho Paper to be 

creditworthy each year from 1998 

through 2005 (a copy of this 

memorandum is available in the CRU). 

Regarding Poongman, we preliminarily 

determine Poongman to be 

uncreditworthy in 2004. See 

Memorandum to the File Regarding 

Poongman’s Creditworthiness (March 

29, 2007), which is available in the 


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5 In reporting economic activity that contributes 

to the Korean GDP, the BOK does not report a 

category particular just to the paper sector. The 

paper sector’s contribution to GDP is contained 

within the category ‘‘wood, paper, publishing, and 

printing.’’ Therefore, to conduct our GDP analysis, 

we are using this broad category. To the extent that 

we could, we combined the lending data for ‘‘wood, 

paper, publishing, and printing’’ to achieve an 

‘‘apples-to-apples’’ comparison between share of 

GDP and share of loans for this sector. See KDB 

Memorandum, for more discussion. 

CRU. Therefore, pursuant to 19 CFR 

351.505(a)(3)(iii), we derived an 

‘‘uncreditworthy’’ benchmark interest 

rate and used it to calculate the benefit 

that Poongman received from debt that 

was forgiven in 2004. For information 

on Poongman, see the ‘‘Poongman’s 

Restructuring’’ section below. 

F. Equityworthiness 

Section 771(5)(E)(i) of the Act and 19 

CFR 351.507 state that, in the case of a 

government-provided equity infusion, a 

benefit is conferred if an equity 

investment decision is inconsistent with 

the usual investment practice of private 

investors. According to 19 CFR 351.507, 

the first step in determining whether an 

equity investment decision is 

inconsistent with the usual investment 

practice of private investors is 

examining whether, at the time of the 

infusion, there was a market price for 

similar, newly issued equity. If so, the 

Department will consider an equity 

infusion to be inconsistent with the 

usual investment practice of private 

investors if the price paid by the 

government for newly issued shares is 

greater than the price paid by private 

investors for the same, or similar, newly 

issued shares. See 19 CFR 

351.507(a)(2)(i). 

If actual private investor prices are 

not available, then, pursuant to 19 CFR 

351.507(a)(3)(i), the Department will 

determine whether the firm funded by 

the government-provided infusion was 

equityworthy or unequityworthy at the 

time of the equity infusion. In making 

the equityworthiness determination, 

pursuant to 19 CFR 351.507(a)(4), the 

Department will normally determine 

that a firm is equityworthy if, from the 

perspective of a reasonable private 

investor examining the firm at the time 

the government-provided equity 

infusion was made, the firm showed an 

ability to generate a reasonable rate of 

return within a reasonable time. To do 

so, the Department normally examines 

the following factors: (1) Objective 

analyses of the future financial 

prospects of the recipient firm; (2) 

current and past indicators of the firm’s 

financial health; (3) rates of return on 

equity in the three years prior to the 

government equity infusion; and (4) 

equity investment in the firm by private 

investors. 

Section 351.507(a)(4)(ii) of the 

Department’s regulations further 

stipulates that the Department will 

‘‘normally require from the respondents 

the information and analysis completed 

prior to the infusion, upon which the 

government based its decision to 

provide the equity infusion.’’ Absent an 

analysis containing information 

typically examined by potential private 

investors considering an equity 

investment, the Department will 

normally determine that the equity 

infusion provides a countervailable 

benefit. This is because, before making 

a significant equity infusion, it is the 

usual investment practice of private 

investors to evaluate the potential risk 

versus the expected return, using the 

most objective criteria and information 

available to the investor. 

In the Initiation Notice, we indicated 

that we would investigate Shinho 

Paper’s equityworthiness for the period 

1998 through 2005, and Poongman’s 

equityworthiness for 2004. As discussed 

in the March 29, 2007, memorandum 

entitled ‘‘Shinho Paper’s 

Equityworthiness and 

Creditworthiness’’ (which is on file in 

the CRU), we preliminarily determine 

that Shinho Paper was equityworthy 

each year from 1998 through 2005. For 

information on Poongman, see the 

‘‘Poongman’s Restructuring’’ section, 

below. 

I. Programs Preliminarily Determined 

To Be Countervailable 

A. Long-Term Lending Provided by the 

KDB and Other GOK-Owned Institutions 

Petitioner alleges that lending by the 

KDB to the Korean paper sector was a 

financial contribution, which provided 

a benefit and was specific to the paper 

sector. Petitioner also argues that in 

addition to the KDB, the Industrial Bank 

of Korea, National Agricultural 

Cooperative Federation, the National 

Federation of Fisheries, and the ExportImport Bank be treated as governmental 

authorities, consistent with our 

approach in DRAMS Investigation. See 

Petition for the Imposition of 

Countervailing Duties from Petitioners 

to the Department at 15 (October 31, 

2006) (‘‘Petition’’). Petitioner alleges 

that GOK lending by these various 

government entities was specific to the 

paper industry. In its allegation, 

petitioner suggests that the Department 

adopt a methodology under which the 

amount of the paper sector’s share of 

KDB loans is compared to the paper 

sector’s contribution to the total 

manufacturing output in Korea. 

According to petitioner, where this 

analysis shows that the amount of the 

paper sector’s loans from the KDB 

exceeds that sector’s share of Korean 

manufacturing output, the Department 

should find that the paper sector 

received a disproportionate share of 

KDB loans, i.e., which is therefore 

specific under section 771(5A)(D)(iii) of 

the Act. See Petition, at 17–18. 

As explained above, the Department 

preliminarily agrees that KDB and other 

GOK lending institutions provide a 

financial contribution to the Korea 

paper sector under section 771(5)(D)(i) 

of the Act. We also preliminarily 

determine that KDB lending to the paper 

sector was specific in accordance with 

section 771(5A)(D)(iii)(III) of the Act 

because the paper sector received a 

disproportionate share of KDB loans 

between 1999 and 2005 when compared 

to that sector’s contribution to the 

overall Korean Gross Domestic Product 

(‘‘GDP’’).5 See Memorandum to the File 

Regarding Analysis of Korea Paper 

Sector’s share of KDB Lending (March 

29, 2007) (‘‘KDB Memorandum’’). While 

the record is not adequately developed 

regarding loans provided to the paper 

sector by other GOK lending 

institutions, there is no reason to believe 

that the lending patterns of these other 

government lending institutions would 

be different than the lending pattern of 

the KDB, the country’s leading supplier 

of long-term funds to domestic 

corporations over the period. 

With regard to KDB’s lending to the 

paper sector in the years 1993 through 

1998, we do not have on the record 

KDB-specific lending data for these 

years. The GOK reported that the KDB 

no loner maintains lending data for 

newly issued loans for this period either 

in electronic or paper form. See GOK’s 

questionnaire response at 26 (January 

26, 2007) and at 16 (March 6, 2007). 

However, for the years 1993 through 

1998, we have on the record data on the 

total lending to the paper sector, 

encompassing loans from the KDB, 

other GOK financial institutions, and 

commercial banks. See GOK’s 

questionnaire response at page 20 and 

Exhibits 6 and 7 (January 26, 2007). We, 

therefore, examined the paper sector’s 

share of total lending to the paper 

sector’s share of GDP in each of those 

years. We find that the record indicates 

that the paper sector received a 

disproportionate share of total lending 

in each year 1993 through 1998 when 

compared to the sector’s contribution to 

the overall Korean GDP, and that this 

can serve as a reasonable proxy for the 

KDB-specific lending data. Given the 

finding that the paper sector received a 


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17512 Federal Register / Vol. 72, No. 67 / Monday, April 9, 2007 / Notices 

6A copy of this public document has been placed 

on the record of this review. 

7The CRPA was enacted in September 2001, to 

help stabilize the financial and corporate sectors 

recovering from the 1997 financial crisis by 

allowing for corporate restructurings with more 

transparency and promptness. Its intent is to give 

greater responsibility to the creditors in resolving 

the fate of non-performing debt in the market by 

implementing a corporate risk rating system and 

conducting regular credit risk assessments on 

companies receiving 50 billion won or more in 

credit. 

disproportionate share of KDB loans in 

each year 1999 through 2005, and the 

lending trend identified for the paper 

sector 1993 through 1998, we also 

preliminarily determine that the paper 

sector received a disproportionate share 

of KDB loans between 1993 and 1998, 

and that this lending was specific in 

accordance with section 

771(5A)(D)(iii)(III) of the Act. 

The comparison between KDB 

lending received by the paper sector and 

the paper sector’s contribution to the 

GDP of Korea is consistent with the 

Department’s approach in Plate in Coils. 

See Final Negative Countervailing Duty 

Determination: Stainless Steel Plate in 

Coils From the Republic of Korea, 64 FR 

15530 (March 31, 1999) (‘‘Plate in 

Coils’’); see also Memorandum from 

David Mueller to Holly A. Kuga: 

Regarding Analysis Concerning 

Direction of Credit, Subject: 

Countervailing Duty Investigation 

(March 4, 1998).6

In accordance with 19 CFR 

351.505(c)(2) and (4), for each 

respondent, we calculated the benefit 

for each fixed- and variable-rate loan 

received from the KDB and other GOK 

lending institutions, as well as 

commercial debt issued by KDB where 

relevant, to be the difference between 

the actual amount of interest paid on the 

government loan during the POI and the 

amount of interest that would have been 

paid during the POI at the benchmark 

interest rate. We conducted our benefit 

calculations using the benchmark 

interest rates described in the 

‘‘Subsidies Valuation Information’’

section, above. For foreign currencydenominated loans, we converted the 

benefits into Korean won using the 

appropriate exchange rate. For each 

company, we then summed the benefits 

from the long-term fixed-rate and 

variable-rate won-denominated loans, 

and commercial debt issued by KDB 

where relevant, and divided that 

amount by each company’s total sales 

values for the POI. We preliminarily 

determine the net countervailable 

subsidy rates to be, for: Hansol 1.01 

percent ad valorem, Kyesung 0.01 

percent ad valorem, and Moorim 0.02 

percent ad valorem. 

B. Poongman’s Restructuring 

Petitioner alleges that Poongman, a 

CFS-producing affiliate of Kyesung, 

received countervailable benefits from 

the GOK through extensions of debt 

maturities in 2002 and 2004, and a debtfor-equity swap in 2004. See Petition, at 

67–69. Petitioner states that the KDB, 

owned/controlled by the GOK, was the 

main participant in the debt-for-equity 

swap. Petitioner further alleges that 

Poongman was unequityworthy and 

uncreditworthy in 2004. They base their 

allegation of Poongman’s 

unequityworthiness and 

uncreditworthiness on its financial 

statements and its creditors’

assessments. Therefore, petitioner 

argues that the GOK conferred a benefit 

upon Poongman, within the meaning of 

sections 771(5)(E)(i) and (ii) of the Act, 

in the form of a government equity 

infusion and a loan. Petitioner further 

alleges that the debt-for-equity swap and 

the extensions of debt maturities 

constitute government financial 

contributions within the meaning of 

section 771(5)(D)(i) of the Act. In 

addition, petitioner alleges that this 

program is specific under section 

771(5A)(D)(iii) of the Act, as this 

transaction was limited to Poongman. 

Pursuant to the Corporate Restructuring 

Promotion Act (‘‘CRPA’’), Korea’s 

statutory framework for debt 

restructurings, Poongman’s creditors 

performed a biannual credit assessment 

of the company in 2001.7 As a result of 

this assessment, Poongman received a 

‘B’ rating, which allowed it to go 

through self-restructuring, rather than 

through the formal CRPA process. See 

GOK’s questionnaire response at pages 2 

and 19 (February 2, 2007). Pursuant to 

the self-restructuring, in 2002, 

Poongman was granted an extension on 

the debt maturities for some of its KDB 

loans that were coming due. No other 

creditors besides the KDB granted the 

extensions during this period. As 

discussed further below, the interest 

owed as a result of this extension was 

forgiven and resulted in the provision of 

a countervailable subsidy. 

Following another credit assessment 

in 2002, the KDB classified Poongman 

as a credit risk company and demanded 

it perform self-restructuring in 

accordance with Article 10.3 of the 

CRPA. See id. at Exhibit K–1; see also 

GOK’s questionnaire response at page 

16 (March 16, 2007). As a result, 

Poongman engaged the services of a 

management consulting company to 

provide a financial analysis. The record 

facts further indicate that the 

management consulting company 

provided a report based on commercial 

considerations which served as the basis 

for the restructuring of Poongman and 

its merger with Namhan. See Namhan’s 

questionnaire response at Exhibit L–20 

(February 2, 2007) and Exhibit L–44 

(March 13, 2007). 

In June 2004, Poongman’s 

restructuring package was agreed to by 

Poongman’s creditors and Namhan. This 

package included an agreement that 

Poongman would merge with Namhan, 

Poongman’s creditors would swap 

Poongman’s debt in exchange for shares 

in Namhan, and Poongman’s creditors 

would extend Poongman’s remaining 

debt maturities. Subsequently, 

Poongman’s board of directors approved 

the restructuring package on June 8, 

2004, and the debt-for-equity swap was 

made. Due to volatile market conditions, 

and not due to any changes to the terms 

of the merger, the merger did not take 

effect until July 31, 2005, when 

Poongman’s stocks were swapped for 

Namhan’s stocks. 

In a past review involving a Korean 

corporate restructuring, the Department 

found that in a debt-for-equity swap that 

was conditioned on a merger of a nonequityworthy company (Kangwon) with 

an equityworthy company (Inchon), the 

creditors of the non-equityworthy 

company were effectively exchanging 

their debt for equity in the equityworthy 

company. In that case, Kangwon merged 

into Inchon, with Inchon being the postmerger company. See Final Results of 

Countervailing Duty Administrative 

Review: Stainless Steel Sheet and Strip 

in Coils from the Republic of Korea, 69 

FR 2113 (January 14, 2004) (‘‘Stainless 

Steel’’), and accompanying Issues and 

Decision Memorandum at Comment 3. 

In Stainless Steel, the Department found 

that the terms of the merger and the 

debt-for-equity swap were part of the 

same agreement and that the legal 

requirements for the agreement had 

been fulfilled before the debt-for-equity 

swap took place. Id. Moreover, there 

was no allegation that Inchon was not 

equityworthy, and the Department 

found that the record evidence 

regarding Inchon’s financial status 

provided no reason to question its 

equityworthiness. Id. Consequently, the 

Department concluded that the 

equityworthiness of Kangwon, the nonequityworthy company, was not 

relevant to the determination of whether 

a benefit was conferred. Id. 

In this case, we find that the debt-toequity swap was agreed to by 

Poongman’s creditors on the condition 

that the merger with Namhan would 

occur, and that the share issuance price 

would be the market price. Moreover, 

we find that the terms of the merger and 


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8 DP sells chemical pulp directly to end-users. 

There are no distributors of chemical pulp in Korea. 

9 During the POI, DP remained in court 

receivership. 

10Specifically, as part of DP’s reorganization, the 

shares of Kyesung, Namhan, Poongman, Moorim, 

Moorim SP, and Hankuk Paper Co., Ltd. were 

retired without any compensation. 

the swap were part of the same 

agreement that was approved by 

Poongman’s board of directors. Based on 

record evidence, and consistent with 

Stainless Steel, we preliminarily find 

that, because the swap and the 

extension of debt maturities took place 

on the condition of Poongman’s merger 

into Namhan, Poongman’s creditors 

were effectively exchanging their debt 

for equity in Namhan, an equityworthy 

company. 

In looking to the post-merger entity as 

the reference for analyzing 

equityworthiness and creditworthiness, 

the Department takes due consideration 

of the specific facts of the case. In the 

instant investigation, the record 

evidence shows Namhan to be a larger, 

financially more stable company 

relative to Poongman. In addition, 

petitioner has not alleged that Namhan 

was an unequityworthy or 

uncreditworthy company during the 

relevant time period. Thus, in 

accordance with section 771(5)(E)(i) of 

the Act, we find that the decision by 

Poongman’s creditors to swap debt for 

equity in Namhan was not inconsistent 

with the usual practice of private 

investors and did not confer a benefit to 

Poongman. Therefore, we preliminarily 

find that the debt-for-equity swap and 

the debt maturity extensions that 

occurred in 2004, on condition of the 

merger with Namhan are not 

countervailable. 

However, with regard to the 

forgiveness of interest owed as 

discussed earlier, we preliminarily find 

that this forgiveness of debt constitutes 

the provision of a financial contribution. 

In addition, we preliminarily find that 

it was specific to Poongman within the 

meaning of section 771(5A)(D)(iii) of the 

Act, in that it was limited to one 

company. As such, we preliminarily 

determine the net countervailable 

subsidy to be 0.49 percent ad valorem. 

C. Export and Import Credit Financing 

From the Export-Import Bank of Korea 

(‘‘KEXIM’’) 

The Department has previously 

determined that the GOK’s short-term 

export financing program is 

countervailable. See e.g., Preliminary 

Results of Countervailing Duty 

Administrative Review: CorrosionResistant Carbon Steel Flat Products 

from the Republic of Korea, 71 FR 

53413, 53419 (September 11, 2006), 

(unchanged at the final results, see Final 

Results of Countervailing Duty 

Administrative Review: CorrosionResistant Carbon Steel Flat Products 

from the Republic of Korea, 72 FR 119 

(January 3, 2007)); see also Final 

Affirmative Countervailing Duty 

Determination: Certain Cut-to-Length 

Carbon-Quality Steel Plate From the 

Republic of Korea, 64 FR 73176, 73180 

(December 29, 1999). No new 

information from interested parties has 

been presented in this investigation to 

warrant a reconsideration of the 

countervailability of this program. 

Therefore, we preliminarily find that 

this program is countervailable. 

We preliminarily determine that the 

program is specific, pursuant to section 

771(5A)(B) of the Act, because receipt of 

the financing is contingent upon 

exporting. In addition, we preliminarily 

determine that the export financing 

constitutes a financial contribution in 

the form of a loan within the meaning 

of section 771(5)(D)(i) of the Act and 

confers a benefit within the meaning of 

section 771(5)(E)(ii) of the Act. During 

the POI, Hansol was the only 

respondent that received export 

financing from the KEXIM. 

Pursuant to 19 CFR 351.505(a)(1), to 

calculate the benefit under this program, 

we compared the amount of interest 

paid under the program to the amount 

of interest that would have been paid on 

a comparable commercial loan. As our 

benchmark, we used the short-term 

interest rates discussed above in the 

‘‘Subsidies Valuation Information’’

section. To calculate the net subsidy 

rate, we divided the benefit by the f.o.b. 

value of Hansol’s total exports for 2005. 

On this basis, we preliminarily 

determine the net countervailable 

subsidy rate for Hansol to be 0.13 

percent ad valorem. 

D. Sale of Pulp for Less Than Adequate 

Remuneration 

Donghae Pulp Company (‘‘DP’’) is the 

sole domestic producer/supplier of 

chemical pulp to the Korean pulp and 

paper industry. DP sells one type of 

chemical pulp to CFS producers, 

specifically bleached woodcraft pulp 

from the broadleaf trees. The key input 

into the production of CFS paper is 

chemical pulp, which respondents 

either import or purchase domestically 

from DP. During the POI, all 

respondents purchased chemical pulp 

directly from DP.8

DP was originally Daehan Chemical 

Pulp (‘‘DCP’’), established in January 

1974, under the laws of the Republic of 

Korea, as a government-funded 

enterprise to manufacture and sell 

chemical pulp. DCP changed its name to 

DP in June 1977, and in 1987, the GOK 

sold its interest in DP to several 

companies that were end users of 

chemical pulp. Since June 1989, the 

shares of DP have been listed on the 

Korea Stock Exchange. In April 1998, 

DP declared bankruptcy and applied to 

the court for company reorganization. 

Soon thereafter, DP began operating 

under court receivership.9 In September 

1999, as part of the reorganization, the 

shares of some companies were retired 

without compensation.10 In November 

1999, the shares of the remaining 

shareholders were consolidated and the 

creditors swapped their debt for equity 

shares in DP. As a result of this debt-toequity conversion, KDB became DP’s 

largest shareholder. Officials from the 

KDB are directors on DP’s board of 

directors. 

Respondents argue that, since DP is in 

court receivership, the GOK does not 

control DP or direct it to sell chemical 

pulp to Korean CFS producers for less 

than adequate remuneration. In support 

of their argument, respondents discuss 

that in an earlier Korean CVD 

administrative review, the Department 

found that because Sammi Steel Co., 

Ltd. (‘‘Sammi’’) was in court 

receivership, Inchon Iron & Steel Co., 

Ltd., although a major shareholder, was 

not able to control Sammi’s assets. See 

Final Results and Partial Rescission of 

Countervailing Duty Administrative 

Review: Stainless Steel Sheet and Strip 

from the Republic of Korea, 68 FR 13267 

(March 19, 2003), and accompanying 

Issues and Decision Memorandum at 

Comment 3 (‘‘Sheet and Strip 2003’’). 

However, contrary to respondents’’

argument concerning Sheet and Strip 

2003, the facts of this instant 

investigation in which we are 

examining DP are distinct from the facts 

that we examined with regard to 

Sammi’s court receivership. 

Specifically, in Sheet and Strip 2003, 

we examined Sammi’s court 

receivership in the context of crossownership and the attribution of 

benefits, whereas, in this instant 

investigation, we are examining whether 

DP should be considered a GOK entity 

for purposes of examining whether a 

countervailable benefit is being 

provided. Id. 

In order to assess whether an entity 

such as DP should be regarded as the 

government for purposes of a CVD 

proceeding, the Department considers 

the following factors to be relevant: (1) 

The government’s ownership; (2) the 

government’s presence on the entity’s 

board of directors; (3) the government’s 

control over the entity’s activities; (4) 


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11The PPS is a subsidiary agency of the Ministry 

of Finance and Economy. 

the entity’s pursuit of governmental 

policies or interests; and (5) whether the 

entity is created by statute. See, e.g., 

Final Affirmative Countervailing Duty 

Determinations: Pure Magnesium and 

Alloy Magnesium from Canada, 57 FR 

30946, 30954 (July 13, 1992); Final 

Affirmative Countervailing Duty 

Determination: Certain Fresh Cut 

Flowers from the Netherlands, 52 FR 

3301, 3302, 3310 (February 3, 1987); 

and Final Affirmative Countervailing 

Duty Determination: Stainless Steel 

Sheet and Strip in Coils from the 

Republic of Korea, 64 FR 30636, 30642–

30643 (June 8, 1999) (‘‘Sheet and Strip 

1999’’). 

We preliminarily find DP to be a 

government authority under section 

771(5)(B)(i) of the Act. DP was 

established by the GOK in 1974 to 

address the government’s interest in 

establishing a domestic manufacturer 

and supplier of chemical pulp to the 

paper industry. DP is majority-owned by 

the KDB, a government-owned financial 

institution that also has presence on 

DP’s board of directors. We do not 

believe that DP’s court receivership 

status overrides the factors considered 

by the Department, which are outlined 

above. 

Further, this finding that DP is a 

government authority is consistent with 

prior determinations by the Department. 

For example, the Department 

determined that the actions of Pohang 

Iron and Steel Company, Ltd. 

(‘‘POSCO’’) should be considered as 

actions of the GOK because POSCO was 

a government-owned company. At that 

time, the GOK was POSCO’s largest 

shareholder. See id., at 30642–30643. 

Further, we preliminarily find that 

DP’s provision of chemical pulp 

constitutes a financial contribution 

because it is the provision of a good as 

defined in section 771(5)(D)(iii) of the 

Act. We also preliminarily find that the 

provision of chemical pulp is specific in 

accordance with section 

771(5A)(D)(iii)(I) of the Act because it is 

limited to the pulp and paper industry. 

To determine whether there is a 

benefit from the provision of a good, the 

Act specifies that the Department must 

examine whether the good was provided 

for less than adequate remuneration. 

According to section 771(5)(E) of the 

Act, the adequacy of remuneration with 

respect to a government’s provision of a 

good shall be determined in relation to 

prevailing market conditions for the 

good being provided or the goods being 

purchased in the country which is 

subject to the investigation or review. 

Prevailing market conditions include 

price, quality, availability, 

marketability, transportation, and other 

conditions of purchase or sale. Section 

351.511 of the Department’s regulations 

sets forth, in order of preference, the 

benchmarks that we will examine in 

determining the adequacy of 

remuneration. As discussed under 

351.511(a)(2)(i), the first preference is to 

compare the government price to a 

market-determined price resulting from 

actual transactions within the country, 

including imports. In this case, as DP is 

the only domestic supplier of chemical 

pulp, there is no domestic price that can 

serve as a benchmark price. However, 

the respondents imported chemical 

pulp comparable, in terms of quality 

and quantity, to that purchased from DP 

during the POI. 

To calculate the benefit under this 

program, for each respondent, we 

compared the monthly delivered 

weighted-average price, after all 

discounts, paid to DP for chemical pulp 

to the calculated monthly delivered 

weighted-average import price paid to 

foreign suppliers of chemical pulp. We 

determined the monthly price difference 

and then multiplied the difference by 

the quantity of chemical pulp purchased 

from DP in each respective month of the 

POI. We next summed the price savings 

realized by each company and divided 

that amount by each company’s total 

sales value for the POI. On this basis, we 

preliminarily determine the net 

countervailable subsidy from this 

program for the respondents to be: 0.08 

percent ad valorem for EN Paper, 0.62 

percent ad valorem for Hansol, 0.09 

percent ad valorem for Kyesung, and 

0.02 percent ad valorem for Moorim. 

E. Sales of Pulp From Raw Material 

Reserve for Less Than Adequate 

Remuneration 

The Korean Public Procurement 

Service (‘‘PPS’’),11 established in 

January 1949, is a government 

procurement agency that stockpiles 

certain raw materials (e.g., aluminum, 

copper, and nickel), basic necessities 

(e.g., salt), and industrial use materials 

(e.g., chemical pulp and natural rubber) 

using government funds. PPS facilitates 

the short- and long-term supply of goods 

and seeks to stabilize consumer prices, 

pursuant to the Government 

Procurement Act. 

Each year the PPS formulates a 

storage plan in accordance with the 

economic policies of the GOK. The 

release of stored items is carried out in 

accordance with the yearly plan. The 

GOK reported that prices for released 

items are determined based on the cost 

and market price at home and abroad 

and that in certain circumstances could 

be released for a price lower than the 

purchase price. The PPS publically 

announces the stockpile release sales 

via its website and sells directly to end 

users. During the POI, PPS sold 

chemical pulp, some of which was 

purchased by Moorim SP. 

We preliminarily find that PPS’s 

provision of chemical pulp constitutes a 

financial contribution because it is the 

provision of a good as defined in section 

771(5)(D)(iii) of the Act. We also 

preliminarily find this provision of 

chemical pulp to be specific in 

accordance with section 

771(5A)(D)(iii)(I) of the Act because it is 

limited to end users of pulp or entities 

associated with end users of pulp. 

To determine whether there is a 

benefit from the provision of a good, the 

Act specifies that the Department must 

examine whether the good was provided 

for less than adequate remuneration. 

According to section 771(5)(E) of the 

Act, the adequacy of remuneration with 

respect to a government’s provision of a 

good shall be determined in relation to 

prevailing market conditions for the 

good being provided or the goods being 

purchased in the country which is 

subject to the investigation or review. 

Prevailing market conditions include 

price, quality, availability, 

marketability, transportation, and other 

conditions of purchase or sale. Section 

351.511 of the Department’s regulations 

sets forth, in order of preference, the 

benchmarks that we will examine in 

determining the adequacy of 

remuneration. As discussed under 19 

CFR 351.511(a)(2)(i), the first preference 

is to compare the government price to 

a market-determined price resulting 

from actual transactions within the 

country, including imports. As 

discussed above under ‘‘Sale of Pulp for 

Less Than Adequate Remuneration,’’

DP, a government-owned entity, is the 

only domestic producer of pulp. As 

such, there are no market-determined 

domestic prices for chemical pulp 

available to serve as a benchmark. 

Moorim SP, however, did have imports 

of chemical pulp during the POI. 

To calculate the benefit under this 

program, we compared the price that 

Moorim SP paid to PPS for chemical 

pulp and the import price that Moorim 

paid to a foreign supplier for 

comparable chemical pulp. We 

determined the price differential and 

then multiplied that differential by the 

quantity of pulp purchased from PPS. 

We next divided the price savings by 

the company’s total sales value for the 

POI. On this basis, we preliminarily 

determine the net countervailable 


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12Specifically, the duty drawback amount is 

calculated according to the following two-step 

formula: 

(1) Required Quantity = Export Quantity * 

Required Per Unit Quantity. The ‘‘required per unit 

quantity’’ is determined by each company’s 

production experience. This usage rate is 

determined based on the company’s prior fiscal 

year experience. The GOK reported that if the usage 

rate changes from one year to the next, the company 

must repot its revised usage rate. 

(2) Duty Drawback Amount = Total Import Duty 

Paid * Required Quantity/Total Import Quantity. 

subsidy for Moorim to be less than 0.005 

percent ad valorem. 

F. Reduction in Taxes for Operating in 

Regional and National Industrial 

Complexes 

Under Article 46 of the Industrial 

Cluster Development and Factory 

Establishment Act (‘‘ICDFE Act’’), a 

state or local government may provide 

tax exemptions as prescribed by the 

Restriction of Special Taxation Act. In 

accordance with this authority, Article 

276 of the Local Tax Act provides that 

entities that acquire real estate in a 

designated industrial complex for the 

purpose of constructing new buildings 

or enlarging existing facilities are 

eligible for acquisition, registration, and 

property tax exemptions. Property taxes 

are reduced by either 50 or 100 percent 

for five years from the date the tax 

liability becomes effective. The 100 

percent property tax exemption applies 

to land, buildings, or facilities located in 

industrial complexes outside of the 

Seoul metropolitan area. The GOK 

established the tax exemption program 

under Article 276 in December 1994, to 

provide incentives for companies to 

relocate from populated areas in the 

Seoul metropolitan region to industrial 

sites in less populated parts of the 

country. During the POI, Namhan 

received a property tax exemption 

under Article 276 for the enlargement of 

its manufacturing facility located in the 

Chongup Industrial Complex, which is 

designated under the ICDFE Act. 

In prior Korea cases, the Department 

has determined that local tax 

exemptions provide countervailable 

subsidies. See, e.g., Final Results and 

Partial Rescission of Countervailing 

Duty Administrative Review: Stainless 

Steel Sheet and Strip in Coils from the 

Republic of Korea, 68 FR 13267 (March 

19, 2003), and accompanying Issues and 

Decision Memorandum at ‘‘Inchon’s 

Local Tax Exemption;’’ and Final 

Affirmative Countervailing Duty 

Determination: Certain Cold-Rolled 

Carbon Steel Flat Products from the 

Republic of Korea, 67 FR 62102 (October 

3, 2002), and accompanying Issues and 

Decision Memorandum at ‘‘Local Tax 

Exemption on Land Outside of 

Metropolitan Area.’’ No new 

information from interested parties has 

been presented in this investigation to 

warrant a reconsideration of the 

countervailability of this program. 

Consistent with those prior 

determinations, in the instant 

investigation, the Department 

preliminarily determines that the 

property tax exemption that Namhan 

received is regionally specific under 

section 771(5A)(D)(iv) of the Act, as 

being limited to an enterprise or 

industry located within a designated 

geographical region. We preliminarily 

determine that a financial contribution 

is provided under section 771(5)(D)(ii) 

of the Act, in the form of revenue 

foregone. A benefit is conferred in the 

form of a tax exemption. 

To calculate the benefit, we divided 

Namhan’s property tax exemption by 

the company’s total sales value for 2005. 

On this basis, we preliminarily 

determine the net countervailable 

subsidy under this program to be less 

than 0.005 percent ad valorem. 

II. Programs Preliminarily Determined 

To Not Provide Countervailable 

Benefits During the POI 

A. Duty Drawback on Non-Physically 

Incorporated Items and Excess Loss 

Rates 

The Korean duty drawback system is 

administered by the Customs Policy 

Division of the Ministry of Finance and 

Economy (‘‘MOFE’’). The Act on Special 

Cases Concerning the Refundment of 

Customs Duties, Etc., Levied on Raw 

Materials for Export (‘‘Act on Customs 

Duties’’) governs the duty drawback 

program. Under the Korean duty 

drawback system, for a company to 

receive duty drawback the imported 

material must be physically 

incorporated into merchandise that is 

exported within two years from the time 

the input material is imported. There is 

no import duty on chemical pulp, the 

most important raw material used to 

produce CFS paper. Therefore, CFS 

producers are not eligible to claim duty 

drawback on imports of chemical pulp. 

CFS producers, however, can seek duty 

drawback for import duties paid on 

other materials used in the production 

of CFS paper, e.g., clay, latex, starch, 

pigment, and talcum. Each material has 

its own single import duty rate. 

The GOK states that under the duty 

drawback system only import duties can 

be refunded; no other import fees (e.g., 

value added tax, customs brokerage, 

unloading charges, etc.) are eligible for 

drawback. To seek a drawback of import 

duties, the company must file with its 

local Customs office an application, 

import permits, export permits, and a 

statement of accounts for the required 

amount (see below for a discussion of 

this statement). A company can seek a 

refund of duties through either a 

company-specific method or fixed 

amount refund method (see below for a 

discussion of the two duty drawback 

methods). If the documentation is in 

order, the Customs office refunds the 

applicable duty amount. 

Under section 351.519(a)(1)(i) of the 

Department’s regulations, in the case of 

drawback of import charges, a benefit 

exists to the extent that the amount of 

the remission or drawback exceeds the 

amount of import charges on imported 

inputs that are consumed in the 

production of the exported product, 

making normal allowance for waste. 

Section 351.519(a)(4)(i) states that the 

entire amount of such remission or 

drawback will confer a benefit, unless 

the Department determines that the 

government in question has in place and 

applies a system or procedure to 

confirm which inputs are consumed in 

the production of the exported products 

and in what amounts, and the system or 

procedure is reasonable, effective for the 

purposes intended, and is based on 

generally accepted commercial practices 

in the country of export. 

The GOK submitted information on 

the system that Korean Customs has in 

place to monitor which inputs are 

consumed in the production of the 

exported products and in what amounts. 

As noted, there are two duty drawback 

methods used in Korea: (i) The 

company-specific method, and (ii) the 

fixed amount refund method. Under the 

company-specific method, a company’s 

duty drawback is based upon its 

‘‘statement of accounts for the required 

amount.’’ This statement, which 

contains a formula specific to each 

company, demonstrates the amounts of 

import duty paid on imports and the 

amount of imports used to produce the 

exported product.12

The Customs Services’ Examination 

Department, which is located in the five 

local Customs offices, examines the 

reasonableness and accuracy of the 

required quantity reported in the 

company’s statement. The GOK reported 

that this process is an examination of 

the documents submitted because there 

is no issue regarding the usage rate for 

the imported raw materials. The GOK 

explained that all of the imported inputs 

for which the respondents claimed and 

received duty drawback are consumed 

in the production process (i.e., clay, 

latex, starch, pigment, and talcum) and, 

therefore, there is no loss rate regarding 

the usage of these inputs in the claims 


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13The Korean Customs Service calculates a fixed 

refund rate when it is necessary to simplify the 

refund procedure for customs duties on certain 

export items having an extraordinary production 

process (e.g., when two or more products are 

produced simultaneously using one raw material or 

export or when the exported goods are produced by 

a small and medium enterprise). 

14The fixed amount of duty refunded per 10,000 

KRW of FOB export value is 70 (which is the perunit duty refund) for subject merchandise. The HS 

code is 4810.19–1000. 

15 In its allegation concerning the ‘‘Funding for 

Technology Development and Recycling Program,’’

petitioner alleged that the GOK provides support to 

the pulp and paper industry for clean technology 

development and enhancement of used-paper 

recycling systems. See Initiation Checklist at 

‘‘Funding for Technology Development and 

Recycling Program.’’ Also, in its allegation, 

petitioner alleged a connection between the IBF and 

the CPDP. The GOK reported, however, that the IBF 

is a loan program and the CPDP is an R&D support 

program. We preliminarily find no relationship 

between the IBF and CPDP and, therefore, are 

treating them as two separate programs. 

16 for more information, see ‘‘Allocation Period,’’

above. 

17See Final Affirmative Countervailing Duty 

Determination: Structural Steel Beams From the 

Republic of Korea, 65 FR 41051, (July 3, 2000) (’’SBeams’’) (from 1985 through 1991); Final Negative 

Countervailing Duty Determination: Stainless Steel 

Plate in Coils From the Republic of Korea, 64 FR 

15530 (March 31, 1999) (’’Steel Plate in Coils’’) 

(from 1992 through 1997); Final Results and Partial 

Rescission of Countervailing Duty Administrative 

Review: Stainless Steel Sheet and Strip in Coils 

From the Republic of Korea, 67 FR 1964, (January 

15, 2002) (’’Sheet and Strip’’) (for 1999); Notice of 

Final Affirmative Countervailing Duty 

Determination: Certain Cold-Rolled Carbon Steel 

Flat Products From the Republic of Korea, 67 FR 

62102, (October 3, 2002) (‘‘Cold Rolled’’) (for 2000); 

Final Results of Countervailing Duty Administrative 

Review: Stainless Steel Sheet and Strip in Coils 

from the Republic of Korea, 69 FR 2113, (January 

14, 2004) (’’Sheet and Strip 2001 Review’’) (for 

2001). 

for duty drawback. The GOK also 

reported that the company-specific 

formula is subject to verification by the 

local Customs authority if, for example, 

the ratio calculated by the company is 

higher than the ratio calculated by other 

companies in the same industry for the 

same product. During the POI, EN 

Paper, Hansol, Moorim Paper, Moorim 

SP, and Namhan used the companyspecific method. 

Under the fixed amount refund 

method, the Korea Customs Service sets 

a fixed amount refund rate by 

harmonized schedule (‘‘HS’’) code 

number of items for export.13 This fixed 

refund amount is calculated on the basis 

of the average refund amount of duties 

or the average paid tax amount on the 

raw materials for export, in accordance 

with Article 16 (simplified fixed amount 

refund) of the Act on Customs Duties. 

The GOK reported that Korean Customs 

reviews the fixed amount of refund 

annually based on the prior year’s 

experience. Specifically, Korean 

Customs calculates and determines the 

fixed duty refund rates each year based 

on its company-specific duty drawback 

application database. To that end, 

Korean Customs collects all duty 

drawback applications for the prior 12 

months and calculates the per-unit duty 

drawback amount by each HS code. 

Korean Customs then selects the duty 

drawback applications for which the 

per-unit duty drawback amount is less 

than the average calculated in order to 

prevent the fixed amount refund from 

exceeding the company-specific 

methods. Korean Customs recalculates 

an average duty drawback amount based 

on these below-average applications. 

Korean Customs then determines and 

announces the per-unit fixed amount 

refund after rounding upwards. The 

GOK provided the calculation 

performed to set the fixed amount of 

duty refund for the subject 

merchandise.14 See GOK’s questionnaire 

response at Exhibit E–7 (March 16, 

2007). During the POI, Kyesung and 

Poongman used the fixed amount 

refund method. 

Each respondent submitted to the 

Department documentation 

demonstrating a sample calculation of 

duty drawback, which was applied for 

during the POI. Based on that 

information, there is no evidence, at this 

time, to suggest that the duty drawback 

program provided to the respondent 

companies a refund of import duties on 

materials that were not physically 

incorporated into exported products or 

excessive refund amounts. Therefore, 

we preliminarily determine that 

respondents did not receive, under the 

duty drawback program, countervailable 

benefits during the POI. However, at 

verification we will further examine 

each company’s duty drawback 

applications and refunded amounts to 

ensure that a countervailable benefit 

was not conferred under the program. In 

addition, we will further examine the 

system at verification to determine 

whether it adequately meets the 

standards for non-countervailability set 

forth in 19 CFR 351.519(a)(4). 

B. Cleaner Production Development 

Project 15

The Cleaner Production Development 

Project (‘‘CPDP’’) of the Korea National 

Cleaner Production Center (‘‘KNCPC’’) 

is a research and development (‘‘R&D’’) 

program. The GOK reported that the 

government and companies make cash 

and in-kind contributions to a research 

institution and then share the results of 

the project. The CPDP was established 

in 1995, under the Act on the Promotion 

of the Conversion into EnvironmentFriendly Industrial Structure and its 

Enforcement Decree. The KNCPC, with 

the support of the Ministry of 

Commerce, Industry and Energy 

(‘‘MOCIE’’), finances and manages the 

cleaner production technology 

development projects that seek to 

prevent or reduce the generation of 

waste during product designing, 

manufacture, delivery, use, and 

disposal. Specifically, MOCIE decides 

which projects will be approved and the 

level of the GOK’s contribution to the 

project, according to criteria specified in 

the Guidelines for the CPDP Operation. 

The GOK’s monetary contribution 

depends on the type of project (general 

or common), the entity in charge 

(company, research institution, or 

university), and whether the project is a 

collaboration of companies and research 

institutions or a project being conducted 

by a single entity. The GOK states that 

the purpose of this collaboration is to 

allow for the sharing of the results of the 

R&D project. 

The GOK reported that a diverse 

grouping of industries has participated 

in the CPDP and received R&D funds 

from the GOK, including paper 

companies. Specifically, Namhan 

participated with another company and 

a research institution in a project. 

Namhan reported that the GOK 

approved the R&D funding for the 

project prior to the POI. 

We preliminarily determine that this 

funding is a non-recurring grant under 

19 CFR 351.524(c)(2)(ii) because receipt 

of the assistance is not automatic, 

requiring the express approval of the 

GOK. Therefore, in accordance with 19 

CFR 351.524(b)(2), we have applied the 

‘‘0.5 percent expense test.’’ 16 The 

calculation demonstrates that the total 

funding amount approved (i.e., GOK’s 

total contribution to the project) is less 

than 0.5 percent of Namham’s 2003 total 

sales. As such, we have expensed the 

benefit in the year of receipt, 2003. 

Therefore, because the CPDP did not 

confer a benefit to Namhan during the 

POI, we preliminarily find that we need 

not conduct a specificity analysis of this 

program. 

III. Programs Preliminarily Determined 

To Not Be Countervailable 

A. Direction of Credit to the Pulp and 

Paper Sector 

Petitioner alleges that the GOK 

directed credit to the pulp and paper 

sector using various means. See 

Initiation Notice. Petitioner cites prior 

countervailing duty cases where the 

Department has found direction of 

credit to the steel 17 and 


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18See DRAMS Investigation Memorandum 

(through 1998). 

19See DRAMS Investigation Memorandum, at 14–

15 (through June 30, 2002); and Issues and Decision 

Memorandum for the Final Results in the First 

Administrative Review of the Countervailing Duty 

Order on Dynamic Random Access Memory 

Semiconductors from the Republic of Korea, 71 FR 

14174 (March 21, 2006) (‘‘DRAMS First Review 

Memorandum’’) (through 2003). 

semiconductor 18 industries as well as to 

an individual semiconductor 

producer 19 to support its allegation that 

the GOK similarly directed credit to the 

paper sector because, petitioner argues, 

the paper sector was a strategic sector 

like steel and semiconductors. See 

Initiation Notice, at 40. 

In prior determinations, the 

Department found that the GOK 

continued to control, directly and 

indirectly, the long-term lending 

practices of most sources of credit in 

Korea through 1998. See Plate in Coils 

and Final Affirmative Countervailing 

Duty Determination: Certain Cut-toLength Carbon-Quality Steel Plate From 

the Republic of Korea, 64 FR 73176 

(December 29, 1999) (’’CTL Plate’’) for 

our findings. Although we determined 

that the GOK directed the provision of 

loans by Korean banks in Plate in Coils 

and Sheet and Strip, we concluded that 

loans from Korean branches of foreign 

banks (i.e., branches of U.S. and foreignowned banks operating in Korea) did 

not confer countervailable subsidies. 

This determination was based upon our 

finding that credit from branches of 

foreign banks was not subject to the 

government’s control and direction. 

Additionally, because these loans were 

not directed or controlled by the GOK, 

we used them as benchmarks to 

establish whether loans from domestic 

banks conferred a benefit upon 

respondents. In S-Beams and CTL Plate, 

the Department found that the GOK 

directed credit to ‘‘strategic’’ industries, 

such as steel, automobiles, and 

consumer electronics, throughout the 

1970s, 1980s, and 1990s. In S-Beams, 

we found that, after the removal of the 

de jure preferences for ‘‘strategic’’

industries in 1985, the GOK continued 

to direct a disproportionate amount of 

lending to steel sector by examining the 

percentage of loans received by the steel 

sector in proportion to the steel sector’s 

contribution to GDP. In DRAMS 

Investigation, we determined that the 

GOK continued to direct credit through 

1998 to the semiconductor sector 

because it was a strategic sector. 

The Department has also addressed 

GOK direction of credit in the years 

subsequent to 1998. The GOK argued in 

the DRAMS Investigation that the post1997 financial reforms instituted 

following the Korean financial crisis led 

to the liberalization of the Korean 

financial sector, resulting in the GOK 

not directing credit provided by 

domestic and government-owned banks 

since 1998. The GOK placed new 

information on the record during the 

DRAMS Investigation to support its 

claim that the GOK did not direct credit 

between 1999 and June 30, 2002. In 

DRAMS Investigation, the Department 

distinguished between banks that are 

themselves government authorities 

within the meaning of section 771(5)(B) 

of the Act and commercial banks that 

are not considered to be government 

authorities. In CTL Plate and S-Beams, 

we found that, although changes had 

been made to the legislation regulating 

government-controlled specialized 

banks, such as the KDB, in the aftermath 

of the financial crisis, the respondents 

did not provide any evidence to 

demonstrate that the KDB has 

discontinued its practice of selectively 

making loans to the steel sector. Record 

evidence from those investigations 

indicate that the KDB and other 

specialized banks, such as the Industrial 

Bank of Korea, continue to be 

government authorities within the 

meaning of section 771(5)(B) of the Act. 

Hence, the financial contributions they 

made fall within section 771(5)(B)(i) of 

the Act. As for the commercial banks in 

which the GOK owned a majority or 

minority stake, the Department 

determined that these entities are not 

GOK authorities within the meaning of 

section 771(5)(B) of the Act. These 

banks act as commercial banks, and 

temporary GOK ownership of the banks 

due to the financial crisis is not, by 

itself, indicative that these banks are 

GOK authorities. 

Direction of Credit Specific to the Pulp 

and Paper Sector 

A significant amount of evidence has 

been placed on the record by petitioner 

to support its allegation. In addition to 

the evidence contained in the petition 

filed on October 31, 2006, the 

Department sought and received 

additional information on direction of 

credit from petitioner. See Submissions 

on behalf of NewPage on November 6 

and 9, 2006. Petitioner alleges that 

‘‘directed lending to the Korean coated 

free sheet producers was specific 

because the GOK targeted the Korean 

paper industry as an industry selected 

for export growth and competitiveness 

* * * within the meaning of section 

771(5A)(D)(iii)(I–IV).’’ See Petition, at 

43. Under section 771 (5A)(D)(iii)(I–IV) 

of the Act, a subsidy is de facto specific 

where (1) the actual recipients, either on 

an enterprise or industry basis are 

limited in number; (2) a recipient, on an 

enterprise or industry level, is a 

predominant user of the subsidy; (3) a 

recipient, on an enterprise of industry 

level, receives a disproportionately large 

amount of the subsidy; or (4) the 

manner in which the authority provides 

the subsidy involves discretion which 

indicates that the recipient industry or 

enterprise is favored over others. 

Petitioner cites to various news 

articles, GOK/KDB publications and 

KDB’s status as a government lender to 

support its direction of credit allegation. 

See Petition, at 39–43. In S-Beams, the 

Department found that direction of 

credit was specific to the steel industry 

because the Korea steel sector received 

a disproportionate amount of directed 

credit. See Final Affirmative 

Countervailing Duty Determination: 

Structural Steel Beams from the 

Republic of Korea, 65 FR 41051 (July 3, 

2000), and accompanying Issues and 

Decision Memorandum, at ‘‘Direction of 

Credit,’’ section (POI 1998). In the 

DRAMS Investigation, the Department 

found direction of credit specific to 

Hynix and the Hyundai Group 

companies from 1999 through mid2002. See DRAMS Investigation 

Memorandum, at ‘‘Comment 2: 

Specificity Relating to Direction of 

Credit.’’ In the first administrative 

review of DRAMS, the Department 

continued to find direction of credit 

specific to Hynix through 2003. See 

DRAMS First Review Memorandum. In 

the second administrative review of 

DRAMS, based on record facts 

particular to Hynix, the Department 

found that the GOK no longer directed 

credit to Hynix in 2004. See Dynamic 

Random Access Memory 

Semiconductors from the Republic of 

Korea: Final Results of Countervailing 

Duty Administrative Review, 72 FR 7015 

(February 14, 2007), and accompanying 

Issues and Decision Memorandum at 

‘‘GOK Entrustment or Direction of Debt 

Reductions,’’ section. 

In this investigation, the Department 

is analyzing whether the GOK directed 

credit to the paper sector during the 

relevant time periods as it had done 

earlier to the steel and semiconductor 

sectors. We preliminarily determine that 

there was no GOK direction of credit 

specific to the paper industry that 

would provide a benefit during the POI. 

As noted above, the Department has 

found that the GOK exerted broad 

control of lending in Korea through 

1998 and that this resulted in credit 

being directed specifically to such 

‘‘strategic’’ sectors as the steel and 

semiconductor industries. However, 

although the paper industry was an 

important part of the Korean economy, 


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we find that the record evidence in the 

instant investigation is not sufficient to 

support a conclusion that the paper 

industry was likewise a ‘‘strategic’’

sector to which, consequently, credit 

was specifically directed by the GOK 

through its wide control of lending. 

For the period subsequent to 1998, we 

examined the paper sector using the 

two-part test articulated in the DRAMS 

Investigation, i.e., whether the GOK had 

a governmental policy favoring that 

sector and, whether record evidence 

establishes a pattern of practices by the 

GOK to act upon that policy to entrust 

or direct creditors to provide financial 

contributions to the paper sector. In 

evaluating the record in this 

investigation, we do not find that the 

evidence supports a finding that a GOK 

policy existed favoring the paper sector 

during the relevant period. There are no 

government statements stating that the 

paper sector is a critical or strategic 

economic sector of the Korean economy. 

There are also no statements by Korean 

officials claiming any paper company 

was ‘‘too big to fail.’’ Nor do we find 

sufficient evidence to support a finding 

that the GOK acted on any policy to 

entrust or direct the paper sector’s 

creditors to make financial 

contributions to the paper sector. 

Consequently, we preliminarily 

determine that there was no government 

entrustment or direction of private 

creditors, and no direction of credit, 

specific to the paper sector that is 

comparable to the earlier direction of 

credit to the steel and semiconductor 

sectors. 

B. Restructuring of Shinho Paper 

As outlined in the Initiation Notice 

and the Initiation Checklist, the 

Department is examining the various 

forms of financial assistance provided to 

Shinho Paper through restructuring of 

Shinho Paper from 1998 to 2005. This 

financial assistance included debt-toequity swaps, conversions of convertible 

bonds to equity, the extension of debt 

maturities, reductions of interest 

obligations, and new loans. Because 

Shinho Paper received assistance 

directly from GOK-owned public 

lending institutions, we preliminarily 

determine that these institutions 

provided Shinho Paper financial 

contributions. 

EN Paper reported that its predecessor 

company, Shinho Paper, was a member 

of the Shinho Group, a conglomerate of 

28 companies that were engaged in the 

manufacture of paper, steel pipes, 

petrochemicals, electronics, and 

machinery, as well as financing, 

transportation, and construction. In late 

1997, during Korea’s financial crisis, the 

Shinho Group began experiencing 

financial difficulties and applied for 

emergency loans from its creditor banks. 

On February 23, 1998, the Shinho 

Group and Korea First Bank (‘‘KFB’’), 

the main creditor bank of the Shinho 

Group, entered into an agreement, 

undertaking to reduce the Shinho’s 

Group’s debt-to-equity ratios by mergers 

or disposition/liquidation of member 

companies or other assets. On July 9, 

1998, the Shinho Group applied to the 

KFB for a ‘‘corporate workout’’ program 

pursuant to the Corporate Restructuring 

Agreement (‘‘CRA’’). On July 14, 1998, 

a Creditors Council was formed for the 

purpose of overseeing the restructuring 

of the Shinho Group. On July 16, 1998, 

the Creditors Council held its first 

meeting and composed three Creditors 

Councils—one for Shinho Paper, one for 

Shinho Petrochemical Co., Ltd., and one 

for Dongyang Steel Pipe Ltd. On July 17, 

1998, Samil Accounting Corporation 

and PricewaterhouseCoopers were 

appointed to conduct separate 

‘‘workout’’ plans for these three core 

companies. 

On September 17, 1998, Samil 

Accounting Corporation and 

PricewaterhouseCoopers submitted the 

‘‘workout’’ plan for Shinho Paper. On 

October 24, 1998, the Creditors Council 

approved a restructuring plan that was 

based on that evaluation. On December 

11, 1998, the KFB and the Shinho Group 

entered into an Agreement of Corporate 

Restructuring to implement the plan. 

The KFB proposed a second 

restructuring plan for Shinho Paper to 

the Creditors Council on November 2, 

1999. Santong Accounting Corporation 

was hired to conduct an evaluation of 

the company, and on January 14, 2000, 

a second ‘‘workout’’ plan was submitted 

to the Creditors Council. After some 

revisions, the committee approved the 

plan on March 4, 2000. 

On September 15, 2001, Korea’s 

Corporate Restructuring Promotion Act 

came into effect. Younghwa Accounting 

Corporation was then appointed to 

evaluate the financial condition of 

Shinho Paper and the progress it was 

making under its ‘‘workout’’ plan. On 

January 3, 2002, the accounting firm 

submitted its review to the Creditors 

Council. The Creditors Council 

approved the plan in early 2002. 

EN Paper reported that, as of 

December 21, 2002, Shinho Paper faced 

de-listing from the Korea Stock 

Exchange because its stock price had 

fallen below the required minimum 

level. As a result, on June 11, 2003, 

Shinho Paper conducted a reverse stock 

conversion to reduce the number of 

shares and increase the price per 

remaining share. On November 3, 2002, 

the Creditors Council decided to sell the 

shares of Shinho Paper and appointed 

KDB-Lone Star as the financial advisor 

to evaluate the value of the company 

and conduct the sale. 

In April 2004, Aram Financial Service 

Inc. was selected as the winner of the 

bidding process, and on November 15, 

2004, a Stock Purchase Agreement for 

Shinho Paper was signed. Thereafter, 

Shinho Paper secured a new large 

syndicated loan and a new credit ceiling 

for letters of credit. EN Paper reported 

that the funds from this new syndicated 

loan were used to repay outstanding 

loans in full, and that, with the takeover 

by Aram Financial Service Inc. and the 

repayment of its outstanding loans, 

Shinho Paper graduated from the 

restructuring plan in December 2004. 

Financial Contribution 

As discussed above, we preliminarily 

determine there was not direction of 

credit to the paper industry during these 

periods. See the Direction of Credit to 

the Pulp and Paper Industry section, 

above. We also preliminarily determine 

that information on the record does not 

support a finding that the GOK 

entrusted or directed other creditor 

banks to participate in financial 

restructuring plans, which involved 

providing credit and other financial 

assistance to Shinho Paper, in order to 

assist Shinho Paper through its financial 

difficulties. We reach this preliminary 

determination on the basis of a two-part 

test. 

First, we examined whether the GOK 

had in place a governmental policy to 

support Shinho Paper’s financial 

restructuring and to prevent the 

company’s failure. Among the evidence 

cited by petitioners was an article from 

the Korea Herald indicating that the 

GOK promoted mergers and acquisitions 

in seven ‘‘overcrowded’’ industries, 

including petrochemicals and steel. See 

Petitioner’s submission of prepreliminary comments, at 91 (March 8, 

2007) (‘‘Pre-Prelim Comments), and 

Petitioner’s submission at Exhibit B–12 

(November 6, 2007). Although these two 

industries are two of the ‘‘core 

businesses’’ of the Shinho Group for 

which ‘‘workout’’ plans were 

undertaken, there is no indication from 

the articles provided by petitioner that 

restructuring the Shinho Group or 

Shinho Paper was a policy goal. 

Additionally, petitioners argued that 

KFB, one of Shinho’s lead creditors, was 

instructed to keep Shinho Bank from 

liquidation. Although the article 

provided by petitioners in support of 

this argument states that Shinho Paper 

is in the process of normalization 

through debt restructuring, it does not 


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provide evidence of the entrustment or 

direction. See Pre-Prelim Comments, at 

91 and Exhibit 25. At this point in the 

investigation, the record does not 

support a finding that the GOK had a 

governmental policy in place with 

respect to either the Shinho Group or 

Shinho Paper. 

We next examined whether the GOK 

engaged in a pattern of practices to 

entrust or direct Shinho Paper’s 

creditors to provide financial 

contributions to Shinho Paper. In 

undertaking this examination, as we did 

in DRAMs Investigation, we considered 

whether there was evidence that the 

GOK influenced financial dealings 

through entrustment or direction of 

Shinho Paper’s creditors. One of the 

many factors we considered in making 

this decision in DRAMs Investigation 

was whether the Creditors Council 

established to oversee and administer 

the bailouts was dominated by GOKowned or -controlled lending 

institutions. We preliminarily do not 

find the same dominance here that we 

did in DRAMs Investigation. Therefore, 

we preliminarily determine that the 

record does not support a conclusion 

that the Creditors Councils established 

to oversee and administer the bailouts of 

Shinho Paper were dominated by GOKowned or -controlled lending 

institutions. 

Additionally, we preliminarily 

determine that the GOK did not engage 

in the various types of actions that we 

found indicative of entrustment or 

direction in DRAMs Investigation. For 

example, there is insufficient evidence 

that GOK officials attended meetings of 

Shinho’s creditors, that the GOK 

coerced or threatened Shinho’s creditors 

to participate in the restructurings, or 

that the GOK used Shinho’s lead bank 

to effectuate a policy of bailing out 

Shinho, among other things. See 

DRAMS Investigation Memorandum, at 

Comment 1. Thus, the evidence on the 

record is insufficient to demonstrate the 

existence of a GOK policy or pattern of 

practices to entrust or direct creditors to 

provide financial assistance to Shinho 

Paper. 

Benefit 

a. Debt-to-Equity Swaps and Conversion 

of Convertible Bonds to Equity 

Under the first Shinho Paper 

‘‘workout’’ plan, the Creditors Council 

authorized for Shinho Paper debt-toequity swaps and conversion of debt to 

convertible bonds. Under the second 

‘‘workout’’ plan, the Creditors Council 

authorized for Shinho Paper additional 

debt-to-equity swaps and approved 

conversion of convertible bonds to 

equity. Under the third ‘‘workout’’ plan, 

the Creditors Council again authorized 

debt-for-equity swaps. EN Paper 

reported the total amount of debt, 

convertible bonds, and unpaid interest 

bonds that was swapped for equity. 

To determine whether these 

conversions of debt and convertible 

bonds to equity conferred a benefit on 

Shinho Paper, we followed the 

methodology described in 19 CFR 

351.507. According to 19 CFR 351.507, 

the first step in determining whether an 

equity investment decision is 

inconsistent with the usual investment 

practice of private investors is 

examining whether, at the time of the 

infusion, there was a market price paid 

by private investors for similar newly 

issued equity. Because private banks 

that participated in the restructuring 

converted debt to equity at the same 

time and terms as the GOK lending 

institutions, we preliminarily determine 

that there is evidence on the record that 

the price paid by the GOK lending 

institutions was a market price paid by 

private investors. See 19 CFR 

351.507(a)(2). Consequently, we 

preliminary determine that the debt-toequity swaps by the GOK lending 

institutions were conducted consistent 

with usual investment practice of 

private investors and thus do not 

provide a benefit to Shinho Paper. See 

19 CFR 351.507(a). 

We note that, as outlined in the 

Initiation Checklist, petitioner alleged 

Shinho Paper received additional debt 

forgiveness from reductions or 

eliminations of interest obligations and 

debt writeoffs which respondents 

explain are accounting adjustments 

pertaining to the numerous debt-forequity swaps and conversions of 

convertible bonds to equity. As noted 

above, EN Paper reported that, in 

additional to unpaid principal, unpaid 

interest was also converted to equity. 

However, EN Paper also reported that 

the total amount of debt, convertible 

bonds, and unpaid interest that was 

converted to equity was less than the 

total amount approved for conversion 

by the Creditors Council. At 

verification, we will examine whether 

any unpaid interest was forgiven as a 

result of Shinho Paper’s restructuring 

process and whether EN Paper provided 

a complete reporting of its debt and 

bond conversions. Accordingly, it is 

unnecessary to reach findings with 

regard to financial contribution or 

specificity. 

b. Extension of Debt Maturities 

As tenets of the ‘‘workout’’ plans, the 

Creditors Council approved reductions 

in interest rates for Shinho Paper’s 

outstanding loans and bonds, and 

evidence on the record indicates that 

Shinho Paper also received such 

extensions of debt maturities. However, 

most of Shinho Paper’s debt and bond 

obligations was either forgiven through 

the equity conversions described above 

or paid off prior to the POI with funds 

from the syndicated loan that Shinho 

Paper received in late 2004. 

EN Paper reported GOK lending 

institution long-term capital leases 

outstanding during the POI which had 

been restructured as a result of decrees 

by the Creditors Council. For these longterm leases, we followed the 

methodology described at 19 CFR 

351.505 to determine whether the 

amount a firm pays on a governmentprovided loan is less than the amount 

the firm would pay on a comparable 

commercial loan that the firm could 

actually obtain on the market. As 

indicated in the Initiation Checklist, 

petitioners alleged that Shinho was 

uncreditworthy from 1998 to 2005. To 

determine whether use of an 

uncreditworthy benchmark interest rate 

was necessary, we examined whether 

there was evidence on the record 

indicating that Shinho Paper could not 

have obtained comparable long-term 

loans from conventional commercial 

sources. We preliminarily determine 

that, because the terms and rate 

structure decreed by the Creditors 

Council applied to long-term capital 

leases held by all of the lenders that 

participated in the restructuring, 

including lenders that are not GOK 

lending institutions, Shinho Paper was 

creditworthy during the year that the 

new loan structure was applied. See 19 

CFR 351.505(a)(4)(ii). 

The record evidence indicates that, 

upon the decree of the Creditors 

Council, both the government and 

commercial creditors received the same 

interest rate and structure for their longterm capital leases. Further, the record 

evidence does not indicate that the 

lending provided by the commercial 

creditors was accompanied by a 

government guarantee. Therefore, 

pursuant to 9 CFR 351.505(a), we 

preliminarily determine that the GOK 

lending institution capital leases 

outstanding during the POI do not 

provide a benefit to Shinho Paper. 

Accordingly, it is unnecessary to reach 

findings with regard to financial 

contribution or specificity. 

c. New Loans 

For the large syndicated loan received 

by Shinho Paper during 2004, which 

was used to repay Shinho’s creditors, 

including GOK lending institutions, we 

followed the methodology described at 


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20 In its allegation concerning the ‘‘Funding for 

Technology Development and Recycling Program,’’

petitioner alleged that the GOK provides support to 

pulp and paper producers through the Industrial 

Base Fund. See Initiation Checklist at ‘‘Funding for 

Technology Development and Recycling Program.’’

21The IBF was originally named the 

‘‘Manufacturing Industry Development Fund.’’ The 

name of the fund was changed in 1999, because the 

Manufacturing Industry Development Act was 

amended to become the Industrial Development 

Act. 

22 IBF program consists of the following eight 

parts: (1) Promotion of Industrial Parts and 

Material; (2) Rationalization of Logistics; (3) 

Establishment of Environment-Friendly Industrial 

Base; (4) Development of Intellectual Industry; (5) 

Activation of Industrial Complex; (6) Development 

of Regional Industry; (7) Cooperation among Large, 

Medium, and Small Enterprises; and (8) 

Establishment of Information System. 

23A copy of this memorandum is available in 

CRU. 

24 In the Final Affirmation Countervailing Duty 

Determination: Stainless Steel Sheet and Strip in 

Coils from the Republic of Korea, the Department 

found that the GOk terminated the Export Industry 

Facility Loan program in 1994 (64 FR 30636,, 30662 

(June 8, 1999), at Comment 19). However, this longterm loan program can provide residual benefits. 

19 CFR 351.505 to determine whether 

the amount Shinho paid on the 

government-provided loans was less 

than the amount Shinho would 

otherwise have to pay on a comparable 

commercial loan that Shinho could 

actually obtain on the market. The 

record evidence indicates that all 

lenders, i.e., both the government and 

commercial creditors, participated in 

the syndicated loan on the same terms, 

such as the interest rate and structure of 

the loan. Further, the record evidence 

does not indicate that the lending 

provided by the commercial creditors 

was accompanied by a government 

guarantee. Consequently, we 

preliminarily find that the participation 

of commercial creditors in the 

syndicated loan provides sufficient 

indication that Shinho received the loan 

on commercial terms. Therefore, we 

preliminarily determine that the 

contributions provided by the GOK 

lending institutions in the syndicated 

loan do not provide a benefit to Shinho 

Paper. Accordingly, it is unnecessary to 

reach findings with regard to financial 

contribution or specificity. 

IV. Programs for Which More 

Information Is Required 

A. Industrial Base Fund 20

The Industrial Base Fund (‘‘IBF’’), 

established in 1986,21 provides policy 

loans pursuant to the: (1) Promotion of 

Small and Medium Enterprises and 

Encouragement of Purchase of their 

Products Act, (2) Industrial 

Development Act, and (3) Guidelines for 

IBF Operation. The purpose of the IBF 

is to contribute to strengthening the 

competitiveness and productivity of 

national industries through the 

development of a strong industrial base 

in Korea. IBF funding is provided to 

companies that expand their facilities 

and make investments in projects as 

provided in the IBF Plan. MOCIE 

manages and supervises the operation of 

the IBF. 

The IBF consists of eight separate 

parts,22 one of which, the Promotion of 

Industrial Parts and Material, provided 

loans to Namhan. No other respondent 

received loans from the IBF. The GOK 

reported that the goal of the Promotion 

of Industrial Parts and Material is to 

provide long-term loans to companies in 

order to support the enhancement of the 

capacity of the facility, productivity, 

factory automation, and product 

development. Namhan received loans 

for the purchase of equipment 

applicable to both subject and nonsubject merchandise. 

The GOK reported that, to apply for 

a loan, a company must submit a 

business plan application, which 

requests information on the company 

and the investment project. The GOK 

provided a copy of a blank application 

with some English translation. See GOK 

questionnaire response at Exhibit I–4 

(January 26, 2007). Petitioner submitted 

to the Department their translation of 

the ‘‘effects of investment’’ section of 

the business plan application. See PrePrelim Comments, at Exhibit 128. 

Petitioner states that the complete 

translation of the ‘‘effects of 

investment’’ section of the application 

includes a request for information on 

the project’s ‘‘export effects’’ and 

‘‘saleable effect of import substitution.’’

See id. at page 81 and Exhibit 128. 

Petitioner, therefore, argues that the IBF 

program is an export subsidy under 

section 771(5A)(B) of the Act. We note 

that the IBF program could also be 

considered an import substitution 

subsidy under section 771(5A)(C) of the 

Act. 

The Department was able to verify 

independently that the respondent did 

not provide a complete translation of 

this section of the application and that 

petitioner’s translation is accurate with 

respect to the request for information on 

exports and import substitution in the 

‘‘effects of investment’’ section of the 

application. See Memorandum to the 

File Regarding the IBF (March 29, 

2007).23

While the application form may 

request such information, we find that 

the record is not adequately developed 

with information on how the GOK uses 

that information in its decision-making 

and whether the GOK, either in whole 

or in part, approves IBF loans based on 

a project’s ‘‘export effects’’ and 

‘‘saleable effect of import substitution.’’

Therefore, we will be seeking more 

information about the IBF program from 

the GOK and Namhan. However, we 

note that the burden is on the 

respondents to demonstrate that 

approval to receive benefits was made 

solely under non-export-related criteria. 

Therefore, the application materials 

themselves may be dispositive, although 

we will seek further information before 

making such a determination. See 

Preamble, 63 FR 65381. 

B. Short-Term Financing Under the 

Aggregate Credit Ceiling Loan 

As discussed in the ‘‘Background’’

section, petitioner, in its prepreliminary comments, claims that 

respondents have received a significant 

amount of short-term lending, which 

was provided by the GOK for financing 

the importation of raw materials as well 

as the export of finished goods. 

Petitioner further claims that the BOK 

administers the trade financing under 

the Aggregate Credit Ceiling Loan 

(‘‘ACCL’’) program. Because the 

Department did not initiate on the 

ACCL program, there is limited 

information on the record of this 

investigation concerning respondents’

use of the program and short-term loans 

outstanding during the POI. Therefore, 

we find that additional information 

regarding the respondents’ short-term 

lending is required to fully analyzed the 

GOK’s provision of these loans. 

Therefore, we will issue soon after this 

preliminary determination a 

supplemental questionnaire to 

respondent companies and the GOK 

concerning the ACCL and short-term 

lending during the POI. 

V. Programs Preliminarily Determined 

To Be Not Used 

We preliminarily determine that the 

producers/exporters of CFS paper did 

not apply for or receive benefits during 

the POI under the programs listed 

below: 

A. Export Industry Facility Loans 24

B. Tax Programs under Restriction of 

Special Taxation Act (‘‘RSTA’’) 

1. RSTA Article 71. 

2. RSTA Article 60. 

3. RSTA Article 63–2. 

For purposes of this preliminary 

determination, we have relied on the 

GOK and respondents’ responses to 

preliminarily determine non-use of 

these programs. During the course of 

verification, the Department will 

examine whether these programs were, 


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in fact, used by respondents during the 

POI. 

Verification 

In accordance with section 782(i) of 

the Act, we will verify the information 

submitted prior to making our final 

determination. 

Suspension of Liquidation 

In accordance with section 

703(d)(1)(A)(i) of the Act, we have 

determined individual rates for EN 

Paper, Hansol, Kyesung, and Moorim. 

The ‘‘All Others’’ rate is Hansol’s CVD 

subsidy rate, because all other company 

rates are below de minimis. Pursuant to 

705(c)(5)(A)(i) of the Act, we do not 

include de minimis subsidy rates in the 

‘‘All Others’’ calculation. The rates are 

summarized below: 

Producer/Exporter Subsidy rate 

EN Paper ......................... 0.08 ad valorem. 

Hansol ............................. 1.76 ad valorem. 

Kyesung (and its affiliate 

Namhan).

0.59 ad valorem. 

Moorim (and its affiliate 

Moorim SP).

0.04 ad valorem. 

All Others Rate ................ 1.76 ad valorem. 

In accordance with section 

703(d)(1)(B) of the Act, we are directing 

U.S. Customs and Border Protection 

(‘‘CBP’’) to suspend liquidation of all 

entries of the subject merchandise from 

Korea, which are entered or withdrawn 

from warehouse, for consumption on or 

after the date of the publication of this 

notice in the Federal Register, and to 

require a cash deposit or the posting of 

a bond for such entries of the 

merchandise in the amounts indicated 

above. This suspension will remain in 

effect until further notice. 

ITC Notification 

In accordance with section 703(f) of 

the Act, we will notify the ITC of our 

determination. In addition, we are 

making available to the ITC all nonprivileged and non-proprietary 

information relating to this 

investigation. We will allow the ITC 

access to all privileged and business 

proprietary information in our files, 

provided the ITC confirms that it will 

not disclose such information, either 

publicly or under an administrative 

protective order, without the written 

consent of the Assistant Secretary for 

Import Administration. 

In accordance with section 705(b)(2) 

of the Act, if our final determination is 

affirmative, the ITC will make its final 

determination within 45 days after the 

Department makes its final 

determination. 

Notification of Parties 

In accordance with 19 CFR 

351.224(b), the Department will disclose 

to the parties the calculations for this 

preliminary determination within five 

days of its announcement. Unless 

otherwise notified by the Department, 

interested parties may submit case briefs 

within 50 days of the date of publication 

of the preliminary determination in 

accordance with 19 CFR 351.309(c)(i). 

As part of the case brief, parties are 

encouraged to provide a summary of the 

arguments not to exceed five pages and 

a table of statutes, regulations, and cases 

cited. Rebuttal briefs, which must be 

limited to issues raised in the case 

briefs, must be filed within five days 

after the case brief is filed. See 19 CFR 

351.309(d). 

In accordance with 19 CFR 

351.310(c), we will hold a public 

hearing, if requested, to afford interested 

parties an opportunity to comment on 

this preliminary determination. 

Individuals who wish to request a 

hearing must submit a written request 

within 30 days of the publication of this 

notice in the Federal Register to the 

Assistant Secretary for Import 

Administration, U.S. Department of 

Commerce, Room 1870, 14th Street and 

Constitution Avenue, NW., Washington, 

DC 20230. Parties will be notified of the 

schedule for the hearing and parties 

should confirm by telephone the time, 

date, and place of the hearing 48 hours 

before the scheduled time. Requests for 

a public hearing should contain: (1) 

Party’s name, address, and telephone 

number; (2) the number of participants; 

and, (3) to the extent practicable, an 

identification of the arguments to be 

raised at the hearing. 

This determination is issued and 

published pursuant to sections 703(f) 

and 777(i) of the Act. 

Dated: March 29, 2007. 

David M. Spooner, 

Assistant Secretary for Import 

Administration. 

[FR Doc. E7–6500 Filed 4–6–07; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

Exporters’ Textile Advisory Committee 

(ETAC); Notice of Open Meeting; 

Addition to the Agenda 

As stated in the notice published in 

the Federal Register on March 9, 2007 

(72 FR 10709), a meeting of the 

Exporters’ Textile Advisory Committee 

will be held on Thursday, April 12, 

2007 from 1:00-4:00 at the Ronald 

Reagan Building, Trade Information 

Center, 1300 Pennsylvania Avenue, NW, 

Washington, DC, 20004, Training Room 

A. 

Addition to the Agenda 

There has been a change to the 

agenda. Mr. Dan Tannebaum, OFAC, 

U.S. Treasury will be briefing the ETAC 

Committee on Textile and Apparel 

Exporter Responsibilities in Complying 

with the Office of Foreign Asset Control 

(OFAC) Requirements Relating to 

Specially Designated Nationals: What 

Exporters Need to Know About their 

Customers and Suppliers. 

The ETAC is a national advisory 

committee that advises Department of 

Commerce officials on the identification 

of export barriers, and on market 

expansion activities. With the 

elimination of textile quotas under the 

WTO agreement on textiles and 

clothing, the Administration is 

committed to encouraging U.S. textile 

and apparel firms to export and remain 

competitive in the global market. 

The meeting will be open to the 

public with a limited number of seats 

available. For further information or 

copies of the minutes, contact Rachel 

Alarid at (202) 482-5154. 

Dated: April 4, 2007. 

R. Matthew Priest, 

Deputy Assistant Secretary for Textiles and 

Apparel. 

[FR Doc. E7–6637 Filed 4–6–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF DEFENSE 

Office of the Secretary 

Transformation Advisory Group 

Meeting of the U.S. Joint Forces 

Command 

AGENCY: Department of Defense. 

ACTION: Notice of closed meeting. 

SUMMARY: The Transformation Advisory 

Group (TAG) will meet in closed session 

on 6–8 June 2007. The establishment 

date was already published in the 

Federal Register on 28 May 2003, in 

accordance with 41 CFR 102–3.150. 

The mission of the TAG is to provide 

timely advice on scientific, technical 

and policy-related issues to the 

Commander, U.S. Joint Forces 

Command as he develops and executes 

the DOD transformation strategy. Full 

development of the topics will require 

discussion of information classified in 

accordance with Executive Order 12958, 

dated 17 April 1995, as amended March 

2003. 


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